Interview with Arun Kumar, CEO of Kerika

We?re an early stage company. We?ve been working in virtual mode from the outset in the sense that we haven?t had permanent offices. We?ve just survived on people working from their homes. And we?ve used a team that has included a number of people at different parts along the way who have done different modules of development for us and that?s worked out pretty well. Right now we are at an interesting phase. We started making our product available to the general public at the beginning of April. And the response has been quite nice and quite surprising in several respects. We?ve had a lot more people come on and start using it. And the sort of profile that we are seeing of people has been quite unexpected I would say.

Okay. We are focusing on how we can make people that work in distributed teams work better, more efficiently, more effectively. And for those parts when people have to share information with others that maybe located next to them or maybe located miles away. For the most part people rely upon e-mail. E-mail is cheap and free but it has some very well known limitations for managing a document and for really conveying the context of your activities. Research has been done in a number of places, Xerox Corp., IBM, Microsoft, going back a long time it shows that e-mail was always designed only to act as a way to have brief conversations, but not being used to, a lot of things that it?s not really well suited for. So what we used to call ourselves was we would say we have a smarter alternative to e-mail when you want to share your document, share your ideas, and organize the process that involves people that are distributed in an office, wherever they are. Our software is written all in Java so that means it runs in Windows and it runs on Mac. Actually it runs on Linux too, but we don?t officially support it. One of our users went to the center supporting it for us.

It works across networks which means that whether you are in an office, whether you?re at home, whether you?re in a coffee shop; you could be connected to your team members. We do all that plumbing for you. So why are we smarter than e-mail? Well because we provide a way for people to convey the context of their projects and what I mean by the context is something like the bigger picture. Most of the times when you want to share a document the hard thing to do is not get the document to summary but just convey the sort of rationale behind the document. You know saying this is my project and this is how I?ll view the project. This document is this part of this project. That?s what I call some of the meta-information of the bigger picture. There?s no way to convey that. So what happens if you don?t convey that? Well then you?re just flooding people with bits and pieces of information and you are relying upon them to simply recreate the picture on their own somehow. We take care of that problem because through Kerika, you can sketch up your project on a canvas, literally. You can draw it up and then you can place your document, your bookmarks, any kind of file in that picture and then you?d level in that picture and then you can decide, okay I want a view of my project. Who are my team members? Who do I want to share what pieces with? And once you set that up and once you decide who you want to share it with, we take care of the rest. Whenever somebody updates something, we make sure everybody?s users are synchronized and especially when it comes to documents. We do a lot of document management which is keeping tracks of different versions, comments that Nathan made versus Susan made and so forth. We actually do a lot of the filing that people have to do by themselves if they were to use something like e-mail.

Well, my previous experiences has been very varied, but when I was working with the investment bank, Morgan Stanley, I was working with them in New York and then in London, and I was very shocked by even a very large organization like that which has tremendous access to technology, none of the tools that were out there were really helping people work when they weren?t there face to face. Like they weren?t really helping distributed teams. And it?s an idea that I maunder where quite a lot when I was deaf and then went on to help found a couple of companies in Europe which were in the financial services area and this idea kept kicking around my head and finally at the beginning of 2002 I decided to move back to the US, decided to move to Seattle and this is something I really need to do and started working on with that.

The thing is in some businesses distributed teams are far more important than others. If you work in a very large company you may actually not have a problem with distributed teams because in very large companies, most of the time you work with people that are often in the same building. So you all have constant access to the same server and you have constant access to people and you can walk down the hallway and meet them. So we actually entrusted in other kinds of, other sectors of economy, especially professional services firms, for example whether they are marketing firms or advertising firms, management consultants, lawyers, and so forth. If you look at the demographics of professional services firms, you will notice a couple of things. One is that the overwhelming majority of professional services firms are small. There are less than twenty people. So when you start looking at small organizations, you realize that vast majority of collaboration when they work with teams is externally driven and externally focused. Because when you have five people in a couple of offices, you don?t really have a problem sharing between the bunch of people. Most of your efforts are about how do I bring in my clients, how do I bring in my partners. You know I have got a new alliance going with somebody with whom I?m going to partner with. Another boutique firm that we?re going to deliver this project jointly for this client, how are we going to make that happen? So our, most of our focus is really been on professional services firms because they have to bring together teams and organizations. That?s where a lot of the old technology kind of breaks down because a lot of the old technology is really designed to help people when everybody is part of the same company and probably not that far away from each other.

We?re kind of going in a different direction. If you look at some of the things you mentioned. Blogs, Wikis, even e-mail is most fundamental thing, it?s fundamentally what I call broadcast media. You put something up and you broadcast into the world. Even with Wiki, it?s really hard to create a dialogue around any idea that?s part of that Wiki. Once you write a Wiki page and there are a lot of different things in there. How do you take individual components of them and sort of develop them in a serendipitous way? It?s interesting enough that you mentioned Wiki because one of my users who hates the blog, happened to write it as a blog a lot of thing and that he would use us as a graphical Wiki because we have a canvas and we can sketch out and we can place pictures as well as contents. He kind of viewed us as the next generation of Wiki because it said we are so-called graphical Wiki. What?s interesting is that not a thought that occurred to me on my own. But this is how one of my users put it on his blog and talked about us.

We intend to create a sort of hybrid model. First of all the software will always be free for a trial period. Beyond the trial period you will have to do one of two things. Either you pay for an individual subscription which will be very low priced. It?s going be sort of in the ten bucks a month rate probably as a basic subscription. And which means for ten bucks a month you?re getting a lot of infrastructure that you would have to pay otherwise for the trip points and setting up servers and stuff, well all that goes away. The other thing that you could do is if you don?t want to pay for it directly, you could get what they call is a sponsored version of the software. This is where a company that wants to advertise to you gets to put their logo, their brand on the screen. This is a little bit different from web advertising because in web advertising you can have any number of advertisements running through the page at any time. With our sponsored version of Kerika there will only be one logo and it won?t look like an advertisement. It will look like that company delivered that product to you. So these two options we?re looking at. One of the reasons we?re looking at the second option of the sponsored software is that we found a very surprising uptake among college students have been working a lot for you with people at UDEF. And they?ve been surprisingly big fans of our software. But college students are not flushed with cash all the time for stuff like this. So we?re looking to see if we can work with sponsor companies to bring the software to them, where the sponsor companies get to do a branding with the college students. But for the most parts people are going to be taking this as a subscription service. Some of our professional services users are planning to give this to their end clients. For example a lawyer might offer Kerika to his client and put his logo on that so it?s a way for them to effectively bring brand loyalty with their clientele.

Well we?ve gotten a surprisingly amount of exposure without spending a dime so far. We?ve had a number of websites just pick it up. The most useful of them has been Apple which made it a featured download in their productivity tool thing and I think it?s still listed actually. And that drew a bunch of Mac users to us. So a lot of that has happened without a lot of effort on our part. We also found that once someone like Apple picks up links to your software, there are a lot of other companies out there that just walks to see what Apple does and they do the same. So we?re getting a lot of action for very little. Right now in the immediate term we just want to continue to see how the usage pattern develops. There are a lot of things around here that I didn?t expect to see that I?m seeing. For example, we?ve got a very large number of overseas users. I have never expected that at all. But we?ve got a lot of people coming in from Europe using the service, even out in Asia and China in fact. So I want to just see how the picture develops a little bit different. I can mix very much to one form of public service versus another. But all of our marketing is going to be based upon driving word of mouth because it?s a collaboration service so it?s in your interest to bring your buddy on board then the two of you can work more effectively. And what we?ve seen right now is just word of mouth growth here, a lot of growth you could call it.

I think in the long term, the software industry keeps consolidating such very part of general techno launches say always going to be an independent player. I see if it is complementing a whole bunch of companies out there that maybe would want to incorporate Kerika into their product offering. So right now you?ve got a lot of buzzword on Web 2.0 which is all about hosting services. So in hosting services you have to basically put all your data all your information sitting up on the host servers and let?s say they have to read that data in order to give you targeted advertisement. Okay I mean that happens with Google Mail for example, and secondly there?s a server that?s reading through your emails to figure out what adds to give to you. What we?re starting to see is the beginning of a little bit of a privacy backlash. Some of our users have said this to us very explicitly one of the reasons I like using Kerika is because you are not in a position to read my data. So I think that once it is little, it?s almost like bubble, the Web 2.0 bubble where everyone thinks yeah it?s got to be up in a cloud in the sky. Where one basic premise of that cloud in the sky model is that some server out there is reading information. And there are a lot of people that already that approve with that idea that someone is sending them ads based on confidential documents that they are writing.

That is a very big problem for some people like for example if you?re dealing with lawyers they simply can?t use those services because they are not really permitted by the State Bar of Court of Conduct to put their data on some servers like that. So they are just starting to consider those things.

Exactly, so there are a lot of industries where it?s simply not even an option, I mean when people get really excited about a Web 2.0 taking over the world, I think they are kind of missing some of the constraints that a lot of people face. Those people have set toward the race specifically, we think privacy is going to be a bigger and bigger issue and we like the fact that you built this as a peer-to-peer network. And I can always have my data on my machine or just send it to somebody I know who would it went to and I put it there.

That was really a big part of our thinking because we saw this big land rush going towards Web 2.0 fairly early on, we said okay. That there is a fundamental problem with that which is company wants to read your files otherwise no one can make any money off of it. And whenever you fight, everybody is tilted on one side of the boat the other side of the boat is not a bad place to be.

Well I think so. I will tell you for example the college student is a good example, right. You have art students that are using our products; they?re not really sensitive to privacy right now, so for the most parts, they?re using it for group class work right?

And, so there?s nothing really secretive from anyone?s perspective and there?s not a lot of, lot to be gained by hacking into somebody?s class project. And you?re not going to find anything if the guy wouldn?t submit in class anyway. So I think for those kinds of stuff, we?ll probably end up offering a hosted service because, it just becomes an efficient way to deal with a lot of people that really don?t have significant privacy control.

Well the one thing that I?ve learnt from past experiences is that you know, I would say every minute that you have and every dollar that you have, you should focus for creating and improving your product. I think a lot of people spend too much time and I have done this in the past, and so I kind of look myself here, they spend too much of their time doing research. After a while when you start, your market research starts to repeat itself and you don?t realize it because you?re really hearing the same set of things from the next prospect and the next prospect. Well once you have, once you have learned enough and you have to be very sensitive that you say, okay I don?t really need to talk more; I need to start building more. And that is I think for me has been the really key lesson as, if you are coming up with something that?s new, you need to really develop your resources into making it happen. Yeah and because no matter how well you researched the use of a product and the marketing environment and all the rest of it; technology is fundamentally a very fungible, malleable thing. People use it for purposes that you never intended it to. There is just no way you can predict that so don?t try to you know plan the whole thing out to the last detail, get it out there and then listen to your users and see what they do with it.

Well, I?ve got a cousin in Washington State, so when I moved away, 25 years ago, and I just wanted to live in the area, I thought, I choose to be living on the East coast, and if you?ve ever been on the East coast you know that Seattle is a lot nicer place to be in. So it was simply a lifestyle decision, you know I liked the whole, I liked the land of mist and most that they call it.

One of those things have, some got to be better than I?d expected, some have turned out to be worse. Before moving to Seattle, I had kind of impression that Seattle was a tremendous hotbed of startups and cell phones, really rivaling Silicon Valley and that?s not really true. What I found here is that people but, it?s a way like trying to, there is lot of times people out there but there aren?t that many kinds of people that really understand what it means to be in a startup and the ups and down of that. And the pool of capital here is just a tiny fraction of what?s available like in some places like California. That?s been a bit of a disappointment around but our publicist from the outside kind of thought that this would be almost, I knew it wasn?t California, but I thought it would be pretty good, but the entrepreneur culture here is still pretty much in pockets. I mean it?s a little bit like your enclosed events. I mean something of that, that?s targeting entrepreneurs, right? There should be like 250 people showing up there.

They have to buy into the vision. I really believe in passing them to everybody else as a genius, I mean I have my ideas, but what I like to try to do is convey the overall mission that I?m trying to achieve here, and then see what?s that individuals bring to the table. So I have worked with people that have technically been very competent, but they work in sort of in a box. And then senses, they want to know what they have to build and only build that, that?s good but, when you are so innovating a lot, and you find a really, do something that hasn?t existed before, that?s the kind of person is someone who can take your ideas and really run with it. I?ve used a number of people in the Seattle area; I?ve used actually somebody as far away as Texas for a key part of the code, somebody that I?ve never met, but I?ve talked too often. And it?s worked out pretty well. So a lot have to do with sort of not technical competence but the ability to buy into a vision and run with it.