Secrets of Consistent Performance in an Unpredictable Market

“We kept our eye out for possible opportunities – not areas of little bits of change – but some places where we would be quite innovative. Something that would make significant change,” Dr. Irwin Jacobs, Qualcomm’s co-founder, had said this in the early days of Qualcomm Inc.

The company embraced this thinking, and it shows in the clear leadership the company has, in terms of innovation in the global market. The start of the venture fund within the company, in the year 2000, to find and support mobile innovation is further testimony to that. Like everything in Qualcomm, Qualcomm Ventures has had a successful run in the last 13 years, having partnered with many innovative entrepreneurs and helping cutting-edge, young businesses grow. In fact, this year Qualcomm Ventures has had successful exits that include: Consert (acquired by Toshiba Corp.); Arieso (acquired by JDSU); iOnRoad (acquired by HARMAN); Waze (acquired by Google); and Validity (acquired by Synaptics).

In a recent conversation with Nagraj Kashyap, head of the division overseeing the company’s investments in wireless industry ventures and Karthee Madasamy, Senior Director, Qualcomm Ventures, Israel and India - YourStory got some interesting insight about what drives this corporate fund to consistently perform in a market which is notorious for its unpredictable outcomes.

Excerpts of the conversation with Nagraj Kashyap.

Mandate

Our mandate is to support the innovation happening in the mobile and wireless ecosystem by actively participating in the various aspects of innovation. Investment becomes one key driver fuelling innovation. We invest across the mobile ecosystem; and it does not matter if the company we are looking at is not working directly with Qualcomm at the time of the investment. Focus clearly remains on cutting-edge product ventures driven by smart CEOs. 

Seed Investment

We participate in seed investments anywhere between 250k and 750k. The mandate for seed is also very broad; it can be us coming in the idea stage to investing when there has been a tangible progress in the idea. Another interesting trend has been that seed rounds are increasingly becoming like series A, with larger rounds and syndication becoming the norm. We have a pretty fast turnaround for seed investments and have done some deals in under 3 weeks.. This is unique for a corporate fund, and the horizontal structure we have within the fund helps us fulfill quick turnarounds. The seed programme within Qualcomm Ventures evolved out of our QPrize™ competition, an annual competition that awards more than US$1M in prize funding to early stage start-ups in eight regions throughout the world. While QPrize selects only one winner from each geography, our seed programme enables us to invest in multiple businesses in the same region. Also, QPrize is cyclical whereas our seed programme runs throughout the year.

“In India, we make seed investment in the range of 200k to 400k and many a times syndicate at that level. Backing a good entrepreneur who is trying to solve a hard and large problem is the key criteria to investing,” added Karthee Madasamy.

Global Fund

We operate as a global fund with offices in seven geographies. Being a global fund gives us a lot more flexibility and insight into what is happening in different markets. Many times companies we see in one geography are similar to companies we see in the other geographies. This gives us a lot more intelligence to assess businesses. Constant eyes and ears from all regions gives us a strong understanding of the market, movement and trends in the making. For instance, we have seen comparable companies in the emerging markets of India, China and Brazil. This helps our regional investment teams quickly look at these opportunities and evaluate. We have also launched a health care fund within Qualcomm Ventures to look at interesting health care ventures leveraging technology to create impact.

Cross-pollination

Our strength lies in our ability to support our entrepreneurs and connect them to different markets across the globe, provide leading tech support, and nurture business opportunities within our portfolio. We add value by helping to define the right processes, assisting in hiring, accessing prospective customers, and making introductions to various opportunities and markets. We actively do all of this and more. At our recent CEO Summit, an annual conference where Qualcomm Ventures portfolio companies come together in San Diego, we encourage deep interaction and want our portfolio companies to cross-pollinate. Adding to Nagraj’s point, Karthee says, “Recently, senior management from one of our portfolio companies, Dolphin Browser, was here in India and my colleague Varsha and I connected her to folks here in India. Also, Apalya, one of our Indian portfolio ventures, is expanding to different regions. Latin America is immediate in their expansion plan, so we made relevant introductions in that market. Similarly we did this for Capillary which has set up offices in the Bay Area.”

Traits of Successful Businesses

If the initial idea turns out not to be the right idea, the right entrepreneur is able to change and adapt quickly. In the Valley and most markets, there are multiple companies with similar ideas. Invariably, what differentiates a company is their team. The most important is the CEO running the company, and then comes everything else. Adaptability, agility and undying perseverance makes an entrepreneur stand apart. And, yes, having a long-term vision pays.

Opportunities in 2014

There are plethora of opportunities out there for entrepreneurs to build and innovate, such as mobile platform, mobile in education, payment, and health. In many areas like payment, pain points still exists, so there is room to innovate. Also, we will increasingly see location as a key feature in many businesses; location provides context to many different aspects of a business. It is pervasive.

The makeup and character of the core employees within Qualcomm have everything to do with its success. In a company that lives or dies by product innovation, the people who drive the ideas are everything said the author Dave Mock in his bestseller, ‘The Qualcomm Equation,’ and Nagraj Kashyap embodies the author’s observation perfectly. Soft-spoken, determined, with a knack for spotting technology trends, Nagraj is surely driving Qualcomm’s vision forward at Qualcomm Ventures.