High Flying Entrepreneur
What if you were an astronaut aboard the Atlantis, NASA's latest venture into space? How would it feel, tearing through the atmosphere and into the vast void of space?
Thanks in no small part to Raj Deshpande and his company, Pulseworks, you could have the experience of such a journey, if not the actual journey itself. Flight simulations as an amusement and education ride is what Pulseworks specializes in. What can be a better testament to the success of the company than the fact that their entertainment flight simulators can be found at the Smithsonian Udvar-Hazy Air and Space Museum in Dulles Airport, Smithsonian Museum of American History in Washington, D.C., and NASA Space Center in Houston, amongst many other locations?
Deshpande is the brains behind this cutting edge phenomenon of space flight simulation. Brilliant as his technical skills doubtless are, they play second fiddle to his entrepreneurial strengths. It is this rare combination that has brought him blazing success, first at a company called Camber Corporation that he acquired in 1992, then at Pulseworks, and most recently with FrameFlow, a visual effects and animation company he co-founded, and in which Sony Pictures now has a 50.1 percent equity investment.
Not surprisingly, Deshpande has an educational pedigree that would all but assure the heights he has scaled. He is a graduate of two of the most premium and respected educational institutions of India, the IIT (Indian Institute of Technology)—Kharagpur, where he earned an electronics and electrical engineering degree, and the IIM (Indian Institute of Management)—Ahmedabad where he acquired an M.B.A. in finance and marketing.
He started his career in 1977 with the renowned Tata Administrative Service in India and was involved in the launch of Tata Burroughs, which became part of the largest IT company in India. Leaving Tata in 1982, the newly married Desphande moved to the United States as an immigrant, planting himself in Houston. He joined Unisys (then still called Burroughs) at the bottom of the ladder, in marketing support, and spent ten years there, working himself up to corporate product management.
In 1992, he acquired Camber Corporation, a start-up with a handful of employees. Specializing in geographic information systems, simulations and information systems, Camber grew rapidly under his stewardship, making the Inc. 500 list a number of years. By the time Deshpande had sold the company, it had almost a thousand employees. When asked the secret of his rapid success, he remarked, "The key was hiring the correct rainmakers to get technology contracts."
Sensing a niche in converting government contracts into commercial entertainment, Deshpande wanted to use his military aircraft flight simulation business to a business in amusement ride technology. Camber created an entertainment division in the UK to design, manufacture and sell entertainment simulators. Realizing that there was more potential in putting the simulators to work than in selling them outright, ever the entrepreneur, Deshpande started a company, Pulseworks with about 50 employees, to buy these entertainment simulators and own and operate them. The military flight simulation business was subsequently sold off and the UK operations licensed off to a UK manufacturer for royalties. At the same time Camber (then a $100 million revenue company) was restructured and sold. It continues today as a much larger and growing company but Deshpande moved on to other ventures.
FrameFlow, Deshpande's latest venture, which is now called Imageworks India, thanks to an outsourcing partnership transaction, is going places, having worked on the visual effects of movies such as Click, Ghost Rider and Spiderman 3.���
A prolific rainmaker himself, Deshpande has been featured a number of times on the INC500 list of fastest growing private companies. He has been nominated and has made the state finals for the E&Y (Ernst & Young) Entrepreneur-of-the-Year Award. He has also been a recipient of a number of similar awards for corporate and community success, notably the Excelsior Award from NETIPN-NY.
Having lived in Atlanta since 1994, he has served as the TiE (The Indus Entrepreneurs) Atlanta chapter president for two years and is currently active in the organization as a mentor. When he is not busy developing companies to their full potential, Deshpande enjoys simple interests such as fitness and gardening with his family. He and his wife Sheila, also an IIT Kharagpur chemical engineer who helps in the family businesses, have three children—Alok, Anusha and Pooja.���
We caught up with Deshpande for a t�te-�-t�te on his latest ventures and interests:
Frameflow has been in the news recently with Sony Pictures buying a stake in the company. How did the deal come about?
I had been on the board of TiE-Atlanta along with Jag Sheth (Dr Jagdish Sheth, acclaimed marketing guru, speaker and author). In 2003, Sheth asked me to meet Hitesh Shah, who wanted to do digital effects for Hollywood and he explained the opportunity there. I showed him the cabinet of papers where I had tracked the industry for several years but could not invest more time because of my other business commitments. The field involved extensive computer generated graphics, but its usage and market wasn't as prolific till the time Hollywood started to make movies like Jurassic Park, which used such graphics extensively. The timing seemed right then and so Hitesh and I founded FrameFlow where I was the Chairman and he became the CEO. I wrote the first check and funded the company. We met with people in the entertainment business and got our partners in India. Then, we founded the studio in Chennai and staffed it with the right people—artists instead of programmers. In September 2005, we landed Sony Pictures as a client. From there the company just took off and we grew rapidly in 2005 and 2006. And before we knew it, Sony showed interest in an ownership stake with us. We explored an outline of partnership and a few months later, in January 2007, we closed. Sony took a 50.1 percent stake in the company, putting in a lot of money, training, and essentially taking us to the next level. It's turned out to be a terrific thing for Sony, the Indian market and us. The studio is in Chennai, Hitesh and I are here in Atlanta and our biggest market is in Los Angeles, so take that as a touch of globalization!
Now that Sony Pictures has a stake in the company, how much of a role do you play at FrameFlow, which is now Imageworks India?
We are more than just board members. Hitesh is very active in the company as the co-managing director. We do get involved, but I don't have an operational role anymore. Sony really didn't want us to walk away. The big advantage to them was that we would make a difference because the work was quicker, cost-effective and efficient.
Tell us about your role in companies you are involved with.
We tend to get into businesses where we are not the sole owners, with partners and people who are experts in certain areas. We reinforce what we know about building businesses, companies, and models. So I have been in businesses like software (currently involved with CyberScrub), mainframes, open systems, networking, geographic information systems, visualization, electronics and electronic manufacture, entertainment, real flight simulators, visual effects with FrameFlow, and now we're getting into biosciences. We have a plant in Nellore, India, which makes molecules like CoQ10 enzymes and other nutritional supplements. We are also getting into investing in cord blood cell banks and stem cell therapy centers.
What are your interests in the field of biosciences?
I am participating in three efforts. One is a plant in Nellore, India. The company is in Chennai called Nutra Specialties Private Limited. The other is a stem cell therapy company we are looking at, which is almost ready but is being incubated. Then, there is the cord blood bank in which I have made a very small investment. It's a bank where when after babies are born, you can keep the umbilical stem cells from them, so that if ever the child requires any medical treatment from stem cells, its own is available. For future generations, this is a great scientific development.
How or why did you get involved with multiple companies at a time?
I found that after a company is anywhere from $50 million upwards in revenue, I just don't enjoy it. I tend to get wanderlust. Even if I own it, the challenges are of a different kind than some of the earlier days when it's more intriguing and inspiring. I also like to learn about different fields and that's how I've been getting into different areas. I have a wide variety of interests and so I get into start-ups in new fields, and go and grow those businesses.
Does not having to worry about money help you be more creative and adventurous in new business ventures?
It works both ways. It enables the privilege of risks and the opportunity to explore new avenues, but there is a part of you that says, "Why not stick with what you know or have already done? Why take additional risk and effort?" I like to learn and try new areas that interest me.
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Raj Deshpande is a prime example of an individual creating his own formula for success in the land of opportunities, learning and growing with each step of progress and sharing that knowledge and drive with others for their development. From his experiences, Deshpande shares, "Learn as much as you can about a business you are entering. Always coach for the upside but plan for the downside."
By RUKSANA HUSSAIN
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