Guest: Aloka Naskar - Brown Venture Associates
Host: Kamla Bhatt - IndiaTech

Kamla Bhatt - IndiaTech
This is Kamla Bhatt for PodTech. Today, we're speaking with Aloka Naskar, who's a Managing Partner at Brown Venture Associate, a boutique executive search firm, located in Menlo Park, California. Aloka has over 20 years of experience in the HR and recruiting space. She was previously at Korn/Ferry's Silicon Valley office, and has worked with some of India's top IT companies like Tata Consultancy Services and Wipro in the early 80s, when these companies were still in their infancy. Welcome to the show, Aloka.

Aloka Naskar - Brown Venture Associates
Thank you, Kamla.

Kamla Bhatt - IndiaTech
Aloka, tell us a bit about BVA.

Aloka Naskar - Brown Venture Associates
We focus particularly on startups. We work with the venture community in helping them build their -- we build the startups that they have funded and again we focus within the startups in information technology and very neatly in Cleantech as well. As you know, Cleantech investments are increasing and over the years, we've done several Cleantech deals or back fee deals and we are going to start focusing on that as well. So, the 90% of our searches are in information technology, they are about 10% in Cleantech and that balance is probably going to shift, as the venture community shifts its balance between information technology and in Cleantech investments.

Kamla Bhatt - IndiaTech
How do you typically conduct an executive search? Do these venture capital firms come to you and say that these are the openings we have in our startups?

Aloka Naskar - Brown Venture Associates
Right, actually it works two ways and before I do that, let me also emphasize that our search as Brown Ventures, while it's a boutique search firm, it is a global search firm. In that about 30-40% of our searches are also done globally focusing on, particularly on Asia Pacific and within Asia Pacific, a lot on India. About 30-40% of our searches are done for companies, either wanting to set up businesses in India or the reverse Indian companies wanting to set up operations in the US. And having said that, yes, we do get calls both directly from entrepreneurs, who have either by word of mouth or through references heard of us or directly also from the venture community, that we've worked with and we tend to work with a number of sort of CO1 venture communities in the bay area.

Kamla Bhatt - IndiaTech
So, what are some of the companies, you've worked with?

Aloka Naskar - Brown Venture Associates
Do a lot of work for US Venture Partners. We've done a lot of work for Sofinnova, for example. Lately we're doing some work for Blue Run Ventures, which is the Nokia Venture Dome. We've done work for Venrock. So, these are the PO1 Venture firms Bay Area and we've done a lot of numerous searches for each of their portfolio companies.

Kamla Bhatt - IndiaTech
What about your searches in India?

Aloka Naskar - Brown Venture Associates
Over the last few years, not 2006 so much, but 2004 and 2005, done for Texas Instruments. We've started work with Genpact, which is the GE GIS services. Genpact, we've just started the relationship, but TI we've done several searches for TI. And we've done also a number of searches for startup companies like Cradle Technologies that have operations here, but have a significant development centre in Pune. There are companies like DIA (ph) Energy, we've just started search for them, it's a CEO search. While the company is here, their significant operations are going to be setup in India, to begin with.

Kamla Bhatt - IndiaTech
So, what level of searches do you do? Is this middle level or is this the C-level?

Aloka Naskar - Brown Venture Associates
We focus entirely on C-level. So, it's the CEO and the direct report. So, those are the searches. And within that, we're open, we do CFO's, we do VPs of marketing, VPs of sales. We tend to focus not so much on functional aspects, but more on the technology. So, if we have a competency in a particular technology, we tend to do those searches. So, for example, all our niches and semiconductors all the way through kind of the system's level, and I also mentioned Cleantech, which actually a lot of the professionals have kind of, as the ventures community focuses on Cleantech when funding, lot of the professionals have moved from or made the transition from the semiconductors into solar or battery ventures. So, that's our sort of niche market or competency.

Kamla Bhatt - IndiaTech
So, you are saying that the professionals have moved from the semiconductor space to the Cleantech space?

Aloka Naskar - Brown Venture Associates
In the transition of, yes. It seems like a natural transition from semiconductor or material space into the Cleantech. So, for example, Cypress Semiconductor has invested in SunPower. A lot of their semiconductor professionals moved over from Cypress Semi into the SunPower Group. As you know, SunPower then went on to having an IPO and has been a successful company. Likewise, there have been other companies that have funded, DIA Energy the company that I am working with right now, have a lot of professionals from the semiconductor area or the systems area that have made that transition. Anybody that understands materials and processes can make that.

Kamla Bhatt - IndiaTech
What are the broad trends that you're seeing in the hiring process? What kinds of skill sets are in high demand?

Aloka Naskar - Brown Venture Associates
Right now, market appears to be very good for the candidates, from the candidate's side. San Jose Mercury had a report the other day, unemployment in the Bay Area is down from 4.6 to 4.1%. A lot of that was due to the fact that the venture community has started investing or making investments. It had dropped significantly in the early 2000. Good professional folks that have solid operational experience are always in high demand. And by that I mean, not those that made the jump to a Vice President level at a time, when in the late 90s or early 20s, when the market was really hot and people kept it of getting promoted for sure need of senior level people. I meant more of the people that had solid sort of operational experience and have had either big company experience and then have moved on to startups and have had significant success. They're always in need.

Kamla Bhatt - IndiaTech
What matters most, degree or experience?

Aloka Naskar - Brown Venture Associates
Ultimately, I really believe that is the experience you can have not the best degrees from the best schools, but it's ultimately what you have done with that at the Vice President, CEO level. We no longer focus as much on the degree as much as, we focus on the achievements they've had within their various jobs that they've had.

Kamla Bhatt - IndiaTech
So, if you had two candidates, both had same kinds of experience, but the only differentiating factor was that one went to a topnotch school and the other went to probably, okay state level school and probably doesn't have an MBA. Who would you get to pick, because you are the one who was screening those candidates and looking at the resumes and then recommending them to your client?

Aloka Naskar - Brown Venture Associates
Sure. Good question and I really go by experience. Now, when we hire a person, it is more than just a resume. In a startup, it also becomes very important in terms of the interpersonal skills of the individual and how that person fits within the culture of a company. Now, keep in mind, startup can range from, anywhere from 5% startup where we've worked with, to 100-150% startup and in the 5-10% startup or 50% startup, it becomes that much more important, the interpersonal skills become that much more important. How the person fits in culturally. Now, you asked if if two people have the same experience, now I'm assuming that both people are equally competent in their roles, because ultimately competency will matter, but beyond that, how that person fits into the circumstance or called the culture of the organization, and what his deliverables are going to be in the next three to six months. And that becomes the kind of the distinguishing factor between two candidates. It's really not so much in the degree that he or she has come with, assuming that both have the same level of competence, then it becomes other sort of softer skills come into play.

Kamla Bhatt - IndiaTech
What are some of the qualities you would look for hiring a person into a startup as opposed to hiring somebody in a Cisco or a Sun?

Aloka Naskar - Brown Venture Associates
Startup has to have an entrepreneurial mentality. Now, whether that person comes from a big company or a small company that ultimately becomes very important. Now, in some cases, we just have to take a risk and if a person has never worked in a startup, but has worked for just very large big companies. We have to kind of assess, what he or she has done within those companies and if he or she has been an entrepreneurial, environment within those companies, so for example, even within a Cisco, you can have someone that has perhaps started a business unit from scratch or come off something from Cisco or has done something that shows that entrepreneurial nature. It does become very important in a startup.

So, that is what we look for. What are his or her ability to take a risk if you will, within reason of course or the ability to roll up your sleeves and do everything that is required in a startup? Even you don't have this big executive's team behind you, that's the difference between someone that you would hire for a Cisco or a bigger company, or someone that you would hire for a startup. Now, I don't believe though that a startup necessarily requires that much more effort than a big company. I mean at the senior level that we are recruiting, at the VP level, even in big companies that we've recruited for, person would have to go all out, they have a certain responsibility and even if it's in the role of a GM. Even in a big company, that person, particularly, in a public company, that person has a bottom line responsibility and it's a different set of stress, but I think its stress, nonetheless.

Kamla Bhatt - IndiaTech
What I'm hearing from you is that, if they had some kind of a P&L responsibility, then they could work in either a big company or a small company.

Aloka Naskar - Brown Venture Associates
Exactly

Kamla Bhatt - IndiaTech
What is the success rate of BVA been in placing people in various startups?

Aloka Naskar - Brown Venture Associates
Brown Ventures takes in -- we do very, very few searches at a time and that's been our philosophy, because we do everything ourselves from the research to the end closure. Our success rate is actually very high. Now, I could not put a percentage on, but we tend not to take searches where we feel, we are not able to contribute or do the search successfully. So, by making that selection upfront, by being selective in the searches we do and by selecting searches where we feel very comfortable and being able to fulfill that role or that specific position, our rate of success is exceptionally high.

Kamla Bhatt - IndiaTech
Let's switch gears and go to India, because you mentioned Asia Pacific and you've also placed people for some Indian companies. In the past few weeks, there has been a lot of talk about the crunch for resources in India. Ram Shriram of Sherpalo Ventures made that very famous statement about how getting technically qualified people in India is proving to be a challenge. What has your experience been with reference to India?

Aloka Naskar - Brown Venture Associates
It has changed significantly. I think from the 90s to or even in the 80s, when I was actually (Inaudible) to what it is now. As you said the last five-six years honestly, the Indian market has boomed and so have expectations in India of the people there. One of the reasons companies like TI and GE are looking out of India for talent is -- that's one of the reasons that there is a talent crunch, in the sense that growth has been explosive, companies like TI and GE cannot keep up with the hiring requirements and hence they're looking outside. One of the reasons they came to us hire for them, people I have saw of Indian origin that are willing to go back to India not as expats which would have been the case in the 90s, but they really want to return to India, because they believe India is the career path for them. That's what we helped TI recruit several people here and return them back to India.

Kamla Bhatt - IndiaTech
What level are these people that you've recruited for? What kind of ...

Aloka Naskar - Brown Venture Associates
They are all senior level. So, they've 15-20 years of experience, aVP, Senior Directors here that are being back or looking to go back to sort of head within TI or GE or head development centers for some of our startups that we've worked within India.

Kamla Bhatt - IndiaTech
What do you thing will be the challenges that Indian companies will face in the next three-five years?

Aloka Naskar - Brown Venture Associates
A couple of things. I think cost structure is being eroded in the sense that, at the senior level where we hire returnees or even when we hire people from India for some of our multinational clients they are setting up development centers there. The senior level folks, there the differential between their compensation and someone with similar experience here, I think has eroded significantly. We've hired people as head of development centers for 150 US, which is actually not that much, that far off for a VP that we would hire here for a startup, and so I think that is going to be a challenge.

The second challenge is growth. I am not sure there is enough talent within India to sustain the kind of growth that they have been experiencing. And hence, I know there are companies like Infosys and TCS that are spreading out and GE for that matter, spreading out and moving into places like China. I just read TCS is going to go from 500 people to 4000 in China. I think one of the reasons, not only are they doing that for globalization, but I think they are facing a challenge within India. I think that sustaining that kind of growth would be difficult in the long term.

Kamla Bhatt - IndiaTech
Have you found any interest from Americans to go and work in India?

Aloka Naskar - Brown Venture Associates
Yes, in fact while we were doing the TI search, we had a lot of interest from Americans wanting to relocate or wanting to go for a few years back to India.

Kamla Bhatt - IndiaTech
Broadly, when you step back and you see there's this huge fundamental shift that's taking place the world over. What are the challenges do you think that you are going to have, that you'll be facing in recruiting talented people, whether its in Silicon Valley, whether its in Asia Pacific or India. What are the global challenges that you are going to face, you think in your space?

Aloka Naskar - Brown Venture Associates
Again, I think the major challenge would be just the shortage of it, so as I said, as a number of companies are growing significantly Cleantech as I said is a new area of investments. They are already facing challenges, because people from the traditional energy don't necessarily always transition well into the Cleantech that's a more entrepreneurial environment. And the folks from semiconductor or materials don't always understand the entire Cleantech technology, as well as what is required. So, that's one area, but again I think even in traditional semiconductor systems, I think the challenge is going to be, to find good people, good qualified people to sustain that growth that we are seeing right now.

Kamla Bhatt - IndiaTech
Finally, if you could share with us a couple of tips on when people, they are looking for jobs at high level, what are some of the key questions that many of them forget to ask or are shy of asking?

Aloka Naskar - Brown Venture Associates
See, I can tell you from a startup perspective, the biggest mistake people make is not delving deep enough into the company from various aspects. I think one, is the financial stability of the company. I mean startups can get funded, and they can say, "We just got funded for 12 million." How long is that 12 million going to last? What is your capital structure? How is that determined? If there is a change of control, what happens then? Who gets the preferences in the stock, for example? So, I have seen a lot of people, particularly from big companies as they transition into startup and they want to do that, I feel they don't dig deep enough into the company, particularly the capital structure. I think the second place where they dig deep enough is the technology. So, where is the technology at? You said, you have a product, what are the customers saying about this product? So, you'd be amazed that the number of people that accept opportunities in startups without doing some basic fundamental do diligence, if you will.

Kamla Bhatt - IndiaTech
So, I am assuming that those are some of the questions that you ask for your clients when you're doing some searches for them.

Aloka Naskar - Brown Venture Associates
Oh, Absolutely. We try and get as much of this information as we can, and we pass a lot of this to the candidates whether they ask us or not and I am amazed that the number of people that do not ask us these questions. I say, "Don't you want to know about the capital structure? What about the stock? Who gets the preferences? What happens if the company sold?" All those kinds of secondary levels of questions, which I don't know, people either are embarrassed or just assume that, startup is a startup and all capital structure is the same, its not. The various evaluations of the company is always different and the capital structure is always of different and they should, particularly if they are transitioning from a big company into a small company, they should ask all these questions.

Again, the technology, is it ready? Is it ready for the next step? Is it ready for the growth? Is it -- or when will it be ready, even if it's not ready? Most candidates assume they are going to go into an interview, they are going to be ask the questions and that's protocol and that's the way it is and I tell them, I said, "This interview is really, should be a two way do diligence and it should be that spend time, okay. You have the first meeting, if things go well and you are interviewed, that's fine, but ask for another meeting where you are going to be asking all the questions and you are going to be doing the do diligence." Go in depth into the technology of the company, what are their market plans? What are their business plans? What markets are they planning to address? What are the next steps? What are -- find out the capital structure because you are going to be part, you are owning 2% of the company. What are you owning, you need to find that out.

Kamla Bhatt - IndiaTech
Great advice. Thank you so much for your time, Aloka.

Aloka Naskar - Brown Venture Associates
Well, thank you Kamla. It's a pleasure to be with you and thank you for having me on.

Kamla Bhatt - IndiaTech
You were listening to Aloka Naskar, who is the Managing Partner at Brown Venture Associate, a boutique executive search firm located in Menlo Park, California. This is Kamla Bhatt for PodTech and as always, thank you for tuning in.