Building tech team, outsourcing development, hiring contractors and angel investing by Vivek Kumar, Director at Dolby Laboratories.

This is Fundraising Radio and today as a guest speaker we have Vivek Kemar, Director at Dolby laboratories, angel investor and advisor. And in this episode we'll mostly focus on the development side - who should try to outsource their development abroad, from the US, when should you actually start hiring full time developers and when should you stick to the contractors. And of course we'll touch on angel investors as Vivek has plenty of experience in that field.

So Vivek, let’s kick off by you giving us some background on yourself and on Dolby laboratories.

Yeah, so as you mentioned, my name is Vivek and I do wear a couple of hats.

I mean, I do have a conventional job, which as you mentioned is being a director in Dolby.

what I do here is I lead an AI team, which focuses on researching and developing audio and speech technologies.

in the past few years we create technologies like speech, compression, voice conversion and things of that. how does it matter, to what we are doing.

to me it is, essential to understand what Dolby bells at Dolby recreate technologies which enhance the entertainment experience.

we have been doing it for over 50 years, going back to 1965 when Ray Dolby created noise reduction solution.

I mean, as a kid, I grew up with that button on my dad's guitar player, which you pressed and magically audio sounded better.

now we create technologies both in audio and video space and the technologies we create touch the whole ecosystem.

They go from content creation side where we work with artists, content creators so that what they are building is captured in a way which their creative intent is preserved.

We work with broadcasters paid or they are your Comcast cable providers on streaming services like Netflix to deliver that experience to you.

we work with consumer manufacturers, be it, your soundbars, your AVRs or even if you are watching something on iPhone and to, and people use our technologies to provide that superior, entertainment experience.

one line summary of what we do is we basically create technologies which enhance and give you that spectacular experience.

my contribution there is looking into technologies which focus on audio and using AI to create state of the art technologies.

Give you a good summary.

Yeah that's a pretty good summary.

That's true.

let's go straight to the outsourcing part.

I've heard tons and tons of stories of startup founders trying to outsource their development to India, Ukraine, Russia, all those countries.

And then they had horrible experience.
say back to the U S stick to the U S developers were extremely expensive.

So what'd you think about outsourcing?

I think it depends on what company you're building and what your core competency is and also how.

okay.

refined or how well what you're building is defined if your code components is not tech and what you're building is well defined.

Outsourcing seems to work pretty well.

some of the challenges I see when people outsource are more around not having the requirement well specified or technology being such a core competent competency of what you're building that you need to have it in house and then transferring it from a consultant to in house seems a bit of a challenge.

I think he also at some of the quality challenges which are occur when you outsource to other countries.

what I have seen most of the time when it happens is because either what you're building is not well specified or you don't have any technical expertise in house to understand what is being built serves your needs.

right, right.

here I'm going to talk about part of a this question of outsourcing and it's when should someone hire a full time employee? So it doesn't matter whether they're doing it out of the U S or injurious, but this is always a question for a startup founder.

If they should start building a full time development team, what do you think is the right stage for that?

Okay.

I think it depends on when or what are you building.

If it's a hot day companies, which I tend to invest in, I would recommend having a engineer or a developer in the founding team itself.

The reason being technology becomes such a core component, for your building is having somebody who is not fully committed to building it.

creates a challenge down the road where the motivations and the alignment of incentives are not just there for the developer to be with you.

Every time a startup as a 10 year commitment, Oh yeah.
every startup starts ambitiously, but few years down the line there would be challenges.

Most startup phase, whether it be economy challenges, internal challenges are things you are building or not getting pills.

you need that relationship, that alignment of incentive so that the technology people are there with you for eternity.

The other question comes is with, if you're building a technology, which is an enabler, but it's not a core competency offered to your building, then you can, I would say in that case, hire a developer.

When you won, you have achieved a product market fit.

If we start hiring developers before you ever achieved a product market fit, developers tend to be more focused on a certain aspect of technology or a certain type of technology during the early stages.

You might iterate a lot and if you end up hiring somebody, say who is a mobile developer and then you realize mobile development is not where you want to be in the initial offering, it ends up in having very awkward conversation or not particularly utilizing the potential of the few employees you have.

Right.

you mentioned that you like to invest in hard tech.

Can you elaborate on that? What have you, what? Give me like two examples of what you have invested in.

let's take a step back and discuss what is different about hot tech companies.

Sure.

I mean if you think about a hot tech companies is they are building something, a an algorithm, build something, your license, be it a biotech or big building, R or even drug discovery.

The background there is it takes a lot of time to build time and money to build it.

the solution on the solution is not obvious.

You may end up not being able to build it.

The other way of thinking about it, a hot tech companies are where are the risks and they're typically in most out of the risks are if I build it, do people want it and heartache.

Say for example, if you're discovering a drug, it's very easy to figure out. If you are able to solve the problem, you will be.
able to find customers for it.
The technical risk there is whether it should be built or not.

that falls for very interesting challenges because it piques their curiosity of a lot of people.

if you have the right set of technology, founders in your company are right set of people who are there, they will be able to get you get investors and trusted.

They will be able to get employees interested.

So hiring becomes easy.

the solving the technical challenges part becomes extremely hard.

in terms of investment I've made, one is a company called where the goal is to develop synthetic human like voices.

Currently they're using deep learning to do that.
Um.
synthesizing speech is something we have been trying to do for decades.

Right.

Currently with deep learning it seems like a near potential, but from a purely technology point of view, having a speech which can totally emulators, get our emotions correct and our meanings correct and our intonation correct.

It's still a very hard problem to solve.

the founders, there were one of the founders, there is a researcher who had worked in the past and he totally made me believe that if this problem can be solved is one of the persons who is who will be able to solve the problem.

The second company I am working with is heiresses, another founder who I've worked at for a very long time. I am not going to go into details of what is building cause it's currently in of Australia mode.
again, a person who has started for a vial focusing one particular problem.
again, if the problem is solved, we will be able to achieve amazing results.

A third company, I can kind of give you brief overview also on which is kind of falls in the category of almost heartache is tangent.

what they're doing is building a beauty product using AI.

Uh,

they actually take again, which is a kind of a generator of networks which are able to generate human like faces.

instead of models being real models, they generate using AI models which are suited to, w which can serve various needs.

For example, if you are marketing beauty products india or China or in Europe, you would want to have a model which represents ethnicity present in those areas so that people buying beauty products can see people wearing beauty products who are all look similar to them.

? Right.

That was a tongue twister.

That makes sense.

though those investments sound tough and quite risky, I'm not a big fan of a deep tag because it's, it's too complicated for me.

why do you choose a deep tech and what do you think is the major difference between deep tech and customer tech.

because he wrote a check, sir.
Why I just taped back because my background is research.
That is something I have been doing for a considerable amount of time. what was your next question?
The next question is,

what's the main difference between the deep tech investing and consumer facing investing? I think the biggest question is a risk factor.

Most consumer facing companies, they are able to build a technology or if you think about it a different way, if you throw enough resources and money at a problem, you will be able to build anything you are able to build.

the risk from a consumer company becomes more of a market risk. What people wanted.

Does it solve the edge people have, well, people continue to pay money for it and hot tech, even if you throw unlimited amount of money and people at the problem, some of these challenges are challenges which cannot be solved.

And I think that is.

the basic difference.

I continue to, I am.

And that's what excites me.

building a technology or helping build a technology which has a potential of changing the world is huge.

We I mean, one of the things I believe startups are doing is fundamentally changing the world.

consumer facing companies tend to change the world from a point of view about how business is done and hard tech companies change the world and how technology is built.

And technology is a multiplier.

once you create any technology which could not be formed, it has a multiplying far.

even though it's extremely risky, the gains code, it really amplifies the gains which could be had there.

Right.

Yeah that does make sense.

as an investor in heartset, what exactly are you looking to see on the beach deck? So I have a lot of friends in consumer facing investing and I know what they're looking for.

what do people who invest in deep tech one to see on the beach deck? uh,

I think it's how, what is the risk? How are you managing the risk and why are you in the best position to manage the risks? I mean the advice you would typically see for consumer facing companies as figuring out what the pain point is, how you're going to solve the pain point and why you are the best person to solve the pain point and which might include questions like why now and why, how do you, how are you better than the competition? And in hot deck it's almost very similar and hot tech typically the pinpoint is well known.

Like if you are discovering a drug, it is well known that if you solve for a drug which is needed, people would buy it.

The challenge becomes what insight do you have, which other people don't have and why are you the one who

has this inside who can solve the problem? So this would mean more concretely it would mean, Hey, for a company like Visory.

no.

What happened in the last five years in technology, neural network came and they totally changed how signal processing was done.

Most of the people tried using signal processing for synthesizing speech. Now I'm using this powerful deep learning networks just set aside for speech.

? Right And the second problem, why am I in the best position to solve it? Say for example, I've been doing research on neural networks for five years.

These are the papers I have published.

These are the insights I've ever had.

incrementally they have solve for technical risks going forward.

I see these four or five technical risks and these are the reasonable ways I think I can solve for these technical risks.

you look at person's background, what he has done, how quickly he's been making improvement. at the end of the day you are taking what you learned from him.
Combine that with your gut reaction and making an investment.
So.

right.

Yeah the process sounds really clear thing.

Thanks for making such a clear outline for that.

here we're probably moving on to one of the last questions of these episodes as what do you think are the first three steps the boundary in deep tech should take to get the first check from an investor?

I'm thinking, okay.

A first chap would be to make sure there are ways of solving the problem and this is a problem you are uniquely capable of solving or you are able to build a team or you are capable of building a team who will be able to solve this problem.

The next thing I would advise them to out if this is a problem worth solving just because it's a hard problem need not be, it's a problem worth solving.

I, there are a lot of hard mathematical problems. Very interesting, fundamentally.
very exciting for a lot of researchers.

I'm not going to invest in that because I don't know if it's a problem worth solving, whether it adds solving another problem would ever benefit humanity or whether we'll be able to monetize it.

thirdly, although not as important as the first two criteria, get a sense from that you'll be able to make a business out of it just because you can solve it.

People might need it need not always be that you'll be able to monetize it.

Mostly it hard tech that is somewhat of a lower risk but could be a risk if it's very fundamental and there is almost no way of monetizing it.

It sometimes can become a challenge.

Personally I haven't run into companies where I have not invested, because there has not been a business case.

Good.

That's really interesting.

recently I've started to making this a call to action thing where I'm trying to make a speaker or recommend something for at least center to do as soon as the opposite episode is over.

right now, most of my listeners are actually early stage founders.

imagine what should they do right now once this episode is over? What's one thing that they should do? I know maybe they should, reach out to someone on LinkedIn who they think they could be a good technical cofounder or on the opposite side of maybe business co-founder.

What was that one thing that they just have to do right now.

for startups in early stages, I would advise them, build tests, and it's good reaching out to fathers.

It's good building a network.

But I cannot emphasize that.

What I would emphasize as people should continue building what they're building and testing their hypothesis with actual customers.

Funding is an accelerator.
It can help speed up what you're doing, but building is what your core competency is.

The speed of execution is in the end, what will matter, the amount of money you raise is does not correlate with how successful.

your startup is going to be.

Your solution and how it helps people make their lives better or solve a problem for them is at the end of the day what matters.

this is a great time to for founders who have lot able to just settle down in your home and build. Right.
That's, I think that's a great wrap up advice.

I think I'm a big believer in hypothesis testing so I totally agree with you on this one and there's a mutually agreeable note.

We'll wrap it up.
Thanks again the vac for coming up and for taking your time to participate on fundraising radio.
I really appreciate it and I think this episode is really helpful for anyone who is working in deep tech. even for those who are working in consumer facing, to go startups.
thanks a lot for your advice and for your, for sharing your knowledge in this field.
Thank you.
It was a fun chat.