Getting Started for a Hardware + Software Company (Qing Lu & Sudhakaran Ram of FocusAI)
Qing and Sudhakaran shared their experiences in founding a company in the security and regenerative AI industry. Our discussion touched on landing investors, and building a passionate and close-knit team, and other aspects of the entrepreneurship journey.
About
Welcome to the 36th installment of Foothill Ventures’ Lessons from Founders series. We periodically publish in-depth founder interviews, ranging from early-stage entrepreneurs to successful businesses. Our conversations cover their personal journeys, the lessons that shaped them, their visions for the future, and their failures. We also learn more about their companies and about the challenges they try to solve. These insights and lessons are applicable to any entrepreneur — current or future.
Focus.AI, established in 2022 in Silicon Valley, develops a Cloud+Edge-based platform that integrates hardware and software and leverages advanced AI for next-generation smart cameras, VSaaS, and Autonomous Driving intelligence.
Qing Lu, CEO and Co-founder of Focus.AI, is a seasoned entrepreneur. He was the former co-founder and CFO of WeRide.ai and the former CFO of Turing.ai, Velodyne LiDAR, Symbio, LitePoint, and PortalPlayer. Sudhakaran Ram, CTO and Co-Founder of Focus.AI, has extensive experience in start-ups and renowned technology companies. Previously, he was the engineering leader at PortalPlayer, Nvidia, Validity Sensor, Synaptics, Microsoft AR/VR, and Google Nest. Having worked as C-level executives in several successful startups, both co-founders have a combination of entrepreneurship and technology industry expertise.
Why we invested in Focus.AI: Focus.AI has a differentiated product and technology fit in large and growing markets. Specifically, the market is $12.7B TAM for video surveillance in the US, with a CAGR of 13.9% and opportunities for new entrants, and $22B TAM for autonomous driving in 2021. Focus.AI’s products are cheaper, more energy-efficient, and have better detection capabilities through edge-based AI. Additionally, they also have an extremely well-qualified technical team that is well-positioned for their target market and with experience across smart cameras, autonomous driving, computer vision, and semiconductors.
How did Focus.AI start?
Qing: In terms of how we started the company, I learned a lot when I was at WeRide and working on computer vision — I was heavily involved with cameras. Shortly after working with the virtual experience at WeRide, I realized that the video management system in the North American market is fairly large, about $50 million a year, with a steady CAGR of 18%. I then came up with this computer vision idea and met with Sudhakaran last year. We went out to hire a team and raised a million dollars from Foothill and other investors who invested in my other companies.
Disruption to the Tech Field
Sudhakaran: One of the things that has happened over time, being in the Valley for 30 years, is that technology is always a cyclical trend. There was compute all in the cloud mainframes to then locally on-premise — it’s a constant cycle that’s evolving. Most recently, the communication and compute cost curves have crossed over. Because of that, computers are cheaper now on the local side, the company’s communication costs are higher, and the cloud costs are higher. Many technology already exists. For instance, reducing the cost, doing it on the edge, including all of the processing of the video — which itself is very compute intensive — and adding machine learning to that compute all exist now. However, moving advanced machine learning models to the camera and making them do their high-performance decision-making is a critical technology breakthrough that we hope to achieve.
Another goal of ours is transforming the very old-school technology of the security industry into a modern field where you can bring in technologies, such as the logic language model, interact with the system, and extract meaningful information live for the customer. Those are breakthroughs that are happening as we speak, and we are trying to bring that into this company.
Investors 101: How to Attract and Pick Investors
Qing: The funding came from my previous investors, like Foothill, who invested in me and my previous company and made the money from those investments. So my successful story and track record are really my number one for attracting investors. My view is that the number one factor for me in raising money is from the investor who made money from investing in you. Secondly, the market works; as mentioned earlier, it is very large. It was demonstrated in this space in other regions. Other companies in this industry have created tens of billions of dollars in company valuation before, so it was a much easier sell to other venture capital investors. Thirdly, the team is important. There is me and Sudhakaran, plus one of my other partners, Shenhuo. Shenhuo was a co-founding member of the Alibaba demo lab. He also has a machine learning, AI, computer vision NLP background. So this is a team that investors are looking at. Number four is that we are able to embrace new technology, like regenerative AI, that others have struggled with managing. We are very confident that we are the only player in this VSAS space that will be able to integrate these regenerative AI features into our products.
In terms of what kind of factors we’re looking at with the investors, my experience was when I was in Velodyne, our series A investors did a fortitude. They did not just give us money, but they also gave us a lot of additional resources. For WeRide, our Series A leading investor was Renault Nissan Mitsubishi, which was back in 2018, the largest OEM in the world. Now, we follow very similar things way. We love to have financial investors who bring the money and give us valued advice, like Foothill. I remember my head of HR was introduced by Xuhui from Foothill from connections back from working in Yahoo. Therefore, for a very early-stage company, you want investors to not only give you money but also provide resources.
Company Culture and Hiring Practices
Sudhakaranan: All through my background, the team is very critical. Most of the time, we’re always looking at the individual’s first level of technical capabilities, which is very important. Fortunately, we are in Silicon Valley, and we have plenty of resources and talented individuals available. However, for me, the critical aspect that I look for is to judge whether the candidate has a can-do attitude. Because technology, especially in a startup is not going to solve everything. You’re going to hit walls multiple times. You have to change and change your direction. Solving different problems every day is a new problem. We have to look for somebody who’s not going to be perturbed by those types of changes. Therefore, I’m always looking for somebody who’s not going to be upset or feel down because they ran into a problem.
Additionally, we need to get together as a team and be able to solve that problem. So we are also looking for team players–somebody who doesn’t want to call it quits and be able to contribute. Moreover, another cultural aspect that I’d like to underline is that everybody is part of that small team. It’s very important to collaborate, where you’re open about everything. You’re able to communicate clearly, set expectations, and grow that company culture not only from myself, but also have individuals contribute amongst themselves in the same manner, so we can collectively solve the problem. Those are the key metrics that I look for.
Lessons in Entrepreneurship: Challenges and Moving Forward
Sudhakaran: Change is constant. You have to be prepared for that. As part of the growing pain, start anticipating from your experience. Where are all the choke points? What to prepare for? You’re never going to get everything right, but you have to be ready: thinking ahead and planning what to expect next week and the following week, and be prepared for things to fall in your lap that you need to solve. That is a constant problem that you must address and prepare your team to be aware of. Secondly, what we commonly do in Focus AI, we are building a security system, a camera, and an advanced camera. We’re not reinventing the camera, but we’re reinventing the software, the technology, and the machine learning. For instance, when we built the cameras very recently, we expected our ODM to deliver the camera. Even though it may be very mundane, it’s a similar camera to what they built before they made mistakes. So, these are the kinds of things that you need to be constantly vigilant of, you will have to look at it. You have to double-check in the end. It affects your life and the company’s life. You need to make sure things are done right. You need to go the extra step to look for how to solve this.
Qing: My perspective may not be as technical as Sudhakaran’s. First of all, finding the right partners as your funding members that you can trust and rely on is extremely important. In my experience, you cannot waste time debating with your partners in the early stage. It is frustrating and time-consuming if we are arguing and needing to convince people unnecessarily in the early stage. Thus, finding people who share the same passion for work earlier is extremely important. When finding a company, not everyone or everything will work out on their own. Therefore, it is essential to have a group of people who share the same passion work together very nicely.
Interviewed by Xuhui Shao. Videographed by Hannah Wu and Heidi Lu.
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Foothill Ventures is a $150M seed-stage technology firm. We back technical founders across software, life sciences, and frontier technologies.
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