Spotlight: A Life of Startups
The serial entrepreneur and startup guru, K. P. Reddy, in an interview with Khabar, shares insights from more than 25 years of entrepreneurship.
“I tell entrepreneurs that start-ups and businesses are not people. I don’t even like calling them companies. Sometimes, they’re just projects. My advice is to exhibit great attachment to people and their relationships, and greater detachment from the projects. If we work on a project together, and if it doesn’t work out due to bad timing or bad market, we can still transit to the next big idea if we have a good relationship that’s not tied to the outcome of any given project.”
The above words of wisdom could well be the crux of K. P. Reddy’s blazing success as a serial technology entrepreneur, angel investor, venture capitalist, and an all-around rainmaker in the region’s startup ecosystem. Along the way, “KP,” as he is affably known in the technology world, has created and sold many successful startups, been involved in IPOs and strategic acquisitions, and lent his expertise to numerous ventures. Currently, he has over 12 companies in his portfolio, that have helped raise over $60 million in seed capital.
KP’s innate entrepreneur was evident from early on in his adult life. He was only 19 when he set up his first business, a dry cleaner in an office building. While this may have been a good indicator of his bent for self-employment, his aptitude and ambition lay much beyond a retail store. After running it for two years, while still in college, he sold the dry cleaner, and decided to capitalize on his programming skills that he had been honing since he was barely a teenager: he ran a software and web development service on the sidelines while working towards a civil engineering degree at Georgia Tech.
After graduation, he joined the prestigious Law Engineering Consultants, but it didn’t take him long to see that his prospects as a civil engineer were limited. Meanwhile his dabbling in technology gave him enough confidence to launch his first company, Cereus Bandwidth, with funds drawn from two credit cards. What started out as providing ISP and related Internet consulting services to small and medium-sized businesses, soon morphed into Cereus Technology Partners, started in 1997, offering solutions in Advanced Internet Communications. Reddy served as the Chief Technology Officer besides also presiding as its President and CEO until its acquisition in 1999. “At Cereus we innovated the telecom space with the convergence of data and voice. We also created the first hosted “apps” on the cloud in 1999. What you see as Enterprise apps in the cloud today, we built them back then,” shares KP.
The company went on to become a publicly traded company on NASDAQ with a market cap of $350 million.
It’s not just his personal successes, but the fact that KP has been a catalyst for many other budding entrepreneurs, that makes his story special. He has lost count of the number of technology start-ups he has set up, run, and invested in. “After my first start-up, which was pretty successful, many of my first 25 or 30 employees all went out to start their own companies. So I was always helping them and engaged with them.”
KP’s bent for helping other entrepreneurs found a synergistic alliance when, in 1998, KP was invited to join TiE Atlanta, a branch of The IndUS Entrepreneurs, a nonprofit founded in Silicon Valley to support start-ups through networking and the raising of capital for new and experienced entrepreneurs. “An article in the Atlanta Business Chronicle talked about the ‘Indian Internet Mafia’ and named a few people, including me, Palaniswamy ‘Raj’ Rajan, Jay Chaudhry, and Deepak Raghavan. I forget what the actual article said, but, ironically, I didn’t know any of these guys. I called up Raj and suggested we should get together. He asked me to consider joining TiE Atlanta. Initially, I sponsored several cycles, but in my year off from work, I spent a lot of time with TiE, which is much more community driven and isn’t just about technology. At TiE, you might start a company that you own forever and bequeath to your kids, as inheritance.”
The aforementioned Raj Rajan, a tech tycoon in his own right, and founding member and past President and Chairman of TiE Atlanta, says, “KP is a good old friend and we’ve worked on many projects together. He has significantly contributed to Atlanta’s start-up ecosystem, and his early work with TiE will always be remembered.”
In 2013, in another serendipitous turn of events, KP was further propelled towards his passion for startups when he joined Advanced Technology Development Center (ATDC), a technology incubator at Georgia Tech, which was founded in 1980 and named by Forbes magazine as one of the “Incubators Changing the World.”
Speaking of how he was inducted into ATDC, KP says, “Blake Patton, who ran ATDC on an interim basis, was a close friend of mine. I had, at that time, taken a year off from work, to hang out with kids right after my divorce. Blake asked me, ‘Look, there are all these start-ups who can use your help. Why don’t you volunteer?’ I volunteered at ATDC, and (eventually) Blake offered me a job, which I accepted. They hired a new general manager, and we are family friends now. He ran it for a bit and I worked for him. Later, they decided to let him go and put me in charge.”
When asked what he envisioned for ATDC when he took the helm, KP exclaimed, “To have tangible outcomes!” He strove to mirror the Georgia Tech culture: “It means something to get into Georgia Tech; it means something to stay in Georgia Tech; and it means something to get out of Georgia Tech. I think, philosophically, that’s what I wanted ATDC to be: the idea is to make it very hard for people to get in, even harder to stay, and, by reputation, if you made it out of ATDC, it wasn’t just because you were there for three years, but because you were successful in those three years.”
Insights into the world of entrepreneurship
All this rigor and experience in the world of startups culminated in his recently released book, What You Know about Startups Is Wrong: How to Navigate Entrepreneurial Urban Legends That Threaten Your Relationships, Your Health, Your Finances, and Your Career.
KP says he began writing the book with the intention of documenting his history for his two boys, who are 17 and 15 years old. “I tell people, my book is really a love note to my kids. I have all these weird memories that might not always be facts. Sometimes, you create your own memories. I began blogging pieces of (these memories). A good friend suggested that I should write a book.” Reluctant initially, KP changed his mind when he realized that “the majority of the wealth in the Indian diaspora in this country is contributed by entrepreneurs. That drove me to write my book.”
(Left) K. P. Reddy at his book launch.
The book, published in January 2018, demystifies the exciting, constantly evolving, and challenging world of start-ups, including dealing with potential minefields, such as how to balance personal life and work, and how to recognize that crucial time to get out of the game or sell your business.
Start-ups, he believes, have acquired the status of pop culture phenomena. “It [appears to be] more about wearing a t-shirt to work, or bringing your dog to work, about parties and hanging out,” he says. “For instance, the people at We Work: Coworking and Office Space, who are great partners of mine, have created this cool culture, and everybody thinks that’s what start-ups are about.”
However, reality can be quite different. The book, therefore, introduces the first-time entrepreneur to what really is the entrepreneurial ‘lifestyle.’ “Make sure you maintain balance between your relationships with friends and family, and your relationship with money,” he writes. “It’s very, very important because the entrepreneurial mindset is, ‘I’m going to go start something. I’m going to sell it in three years, which means I can put my life on hold for three years. I don’t have to be there for my kids. I don’t have to go to the gym for three years. When I sell the company, I’ll be out, I’ll be fine. Right?’ So we procrastinate and push our life to this magic exit, which if it arrives, comes at a heavy price tag!”
Drawing from his own life
KP drew insights from his own life while writing the book. He was born in South Carolina, but his parents moved to Atlanta when he was six months old. He grew up in Stone Mountain. “When I was 13 years old, my dad decided to move back to India. I studied high school in Hyderabad.” Upon his return to the U.S., he went to Georgia Tech.
The book, he says, “chronicles my mistakes.” While his divorce had set him back on a personal level, he says his relationship with his children is pretty amazing now. “Part of it has to do with their age; part of it is just spending lots of time with them and engaging with them. I’m still rebuilding a lot.
“The book does not offer tips on how to set up a super start-up. Instead, I talk about my life as a father, my divorce, my near-death experiences, my relationship with my investors, and my relationship with my employees. It also looks at some of the bad decisions I have made, and why I made those. I have to often remind myself to go back to my book, so that I am not ‘that’ guy ever again.”
Being an entrepreneur, insists KP, is a hands-on job. “When people tell me ‘I’ve gotten into the entrepreneurship program at MIT,’ I’m like, ‘That’s a waste of time.’ I don’t think entrepreneurship is a theoretical teachable thing. I think entrepreneurship is an apprentice program. The reason why about half a dozen of the first 20 or so employees from my first start-up have been fairly successful as entrepreneurs is because we engaged with each other and learned from each other.”
His advice to struggling entrepreneurs: be an expert at one thing, instead of being a generalist. “You need to have your own unfair advantage. You need to know something better than everyone else. Unfortunately, a lot of people right now are just trying to learn a bunch of things. My view is go deep on one topic, know it, and be the expert. Once you do that, the rest becomes easier.”
Atlanta’s startup scene—as seen from KP’s vantage point.
While his own venture fund invests in technology companies across the USA, he isn’t yet supporting any start-up in Atlanta itself, where he has lived since 2009. “I spend a lot of time in New York and San Francisco, and other parts of the world, and I can see what is happening outside Atlanta. We have all the characteristics required for great start-ups, especially a diverse university system. I’m a Georgia Tech guy, but there is also Emory University, Georgia State, Morehouse College, Spelman College, Perimeter, and many more. But any good team requires both technical and creative skills. Culturally, you don’t want a company to be just run by a bunch of engineers. So, the (creative) talent base is being collected. People are very critical of the venture capital community, but I believe capital follows opportunity. If we do not have enough venture capital here, it is because the opportunity doesn’t exist.”
Atlanta, he says, has a whole load of successful dotcoms entrepreneurs who are in their late forties and fifties. “We don’t want to sit back, and write checks. We don’t want to be passive investors–we still have a lot of energy left, and we want to be engaged.” Atlanta, he believes, does not suffer because of lack of talent or ideas, but because it is very fragmented, racially. “The good old boy network is very strong. Our top executives look the same, they all go to the East Lake Country Club. Everybody is hanging out in their own communities. Until we fix this and work together as one community, it’ll be very hard to attract investors.”
Eye on the future
Since 2017, besides offering his advice and support to start-ups, KP has also begun dedicating more funds through The Combine, his venture capital firm. “I’ve been quietly giving to organizations that I think I can make an impact on. To give somebody money is helpful, but to give them money, knowledge, contacts, and counsel, changes everything.”
Always the big-picture thinker, KP has managed to capitalize on his civil engineering degree by making himself a thought leader in the Built environment technology, also known as BuiltTech, which helps shape the future of planning, design, construction, and management of buildings, infrastructure, and cities. “I’m most excited about BuiltTech Labs,” says KP. “With backing from WeWork, we truly have a global platform, and further supported by our fund, we can provide community, capital, and customers, all together in a one stop shop.” The enthusiasm of this serial entrepreneur is evident as he muses about BuiltTech: “The idea of helping launch dozens of companies a year, on a global basis! Plus these startups are on a mission to change the world and reinvent everything. It’s pretty amazing.”
Viren Mayani is a senior contributor at Khabar, with emphasis on interviews of notable folks in music, arts, business, politics, and more.
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