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'Aspiring' versus 'Indulging' in interactive TV

Ela Dutt
India Abroad Correspondent in Washington

Kris Narayan, co-founder and chairman of TeleCruz, believes the Third World is in the "aspiration mode" and the West in the "indulging mode," as far as television is concerned.

His whole marketing strategy for TeleCruz's patented system on chip and software that makes television interactive, is based on this philosophy. The TeleCruz system is placed inside the TV set and not in the set-top box currently in existence.

Born in Delhi and brought up in Hyderabad, Narayan (40), notes: "Most people in America think of entertainment and lazy interactivity when we talk of interactive TV… lazy indulging. Coming from the Third World, I quickly realized that this in fact was going to be much bigger than the US."

The US ships barely 26 million TVs in a year, while the Third World accounts for 1 million, Narayan said, "We began marketing on the slogan- "Aspire is for the Third World" and "Indulge" for Western countries."

For marketing in developing countries, he said, the idea being sold was that interactive TV was an investment in one's children; In the West it is sold as a "cool" device.

TeleCruz he said, wants to be for television what the WinTel (Microsoft Windows and Intel) platform is for computers/Web.

"We are the one-stop-shop providing the complete chip and complete software. He plans to make future versions of the TeleCruz chipset with broadband speed and VCR-type capabilities.

Narayan questions the critique that TeleCruz' interactive platform is slow compared to that available in set-top boxes and other devices.

"Why are we looking at a TV and thinking it should be as super-fast as a PC? It is supposed to be an entertainment device, ten feet from the couch. And when one talks about speed - it makes sense to ask - for what?"

"Focusing in on who is the user and what is important to the user, he notes that in India, Brazil, or China - "You would want a TV that you can do email, chat, etc., on your screen, and what is limiting your speed is the phone line. Isn't it silly to talk about the performance of the components when the pipe itself is slow?" he answers his own question.

The system added to a TV, increases the cost of a set by only $100.

"Affordability is the most important point; and matching the product with viewer experience is the point," Narayan stresses.

He is already selling the platform in Indian market through its strategic partner Videocon, the product being called VOL - short for video-online communicator.

It is also being exported to Africa, Middle East, and since April, to China where it is deployed by Hisense and Chonghong.

Earlier this year, Zenith and Panasonic launched the product in Las Vegas as did Daewoo.

Panasonic will begin selling a TeleCruz-enabled, 27-inch TV later this year, equipped with a wireless phone connection and keyboard for $100 more than a regular set, reports said.

Narayan says three other TV manufacturers and cable service providers in India that he cannot name for confidentiality reasons are soon going to deploy his platform as are seven other TV manufacturers in China.

In Latin America, TeleCruz has partners in Brazil and Argentina going into production right now, and in Korea, he is working with 3 manufacturers, he said.

"This is not a Wall Street American story. It is a worldwide phenomenon," Narayan says and insists he is not an exaggerating. Rather, "It is a natural way of thinking - we are being shortsighted - we have to think of markets in a worldwide way."

Narayan, who did his bachelors in computer and electronics engineering from Osmania University, Hyderabad, and his masters in the same subject from Iowa University, said he realized he wanted to run his own show, as it were, and founded TeleCruz in 1996, after stints with Fairchild Semiconductors, Digital Equipment, LSI Logic, then VLSI, and finally Cirrus Logic in the decade before that.

In each of these companies, he shifted gears from being a design engineer, to program manager, and then on to marketing, covering the whole gamut of skills needed to run a business.

"I concluded I was more of a business-type than engineering-type, and also that I was fairly independent and wanted to start my own company," Narayan, said, "When you are young and restless - you want to climb up top fast."

He had moved to California in 1990, to be with LSI and then VLSI. In the latter company, he said, he had "remarkable success," in redefining the company's goals, "Where in 1990, VLSI was the leading supplier for Apple but seriously challenged by Toshiba and Texas Instruments, it ended up rapidly growing from $39 million revenues to three times that."

The key to the success was that Apple was growing and VLSI was committed to investing in the Apple program.

"And we did what everybody else was just talking about - we took a company that was just supplying application specific integrated circuits and combined the capability of providing other intellectual property or standard functions within those ASICs. By doing this we took away market share from some of our competition."

He joined Cirrus Logic in 1994 (a company started by Silicon Valley pioneer Suhas Patil), in its portable graphics group, a division that Narayan said, was failing in its market share.

"I quickly recognised it as a huge success story. In two short years, we quadruped the business - from a $16 million run-rate to $67 million by Nov.1996. It was a wonderful experience."

All his business acumen is serving him well at TeleCruz, the idea for which germinated while Narayan was at Cirrus.

"My premise was that the Worldwide Web was emerging, and various applications were coming on the horizon that would make TV more than a broadcast entertainment medium. And when you ask yourself what more it can do -- I concluded - any way I look at it, it will be "displaying text and graphics," in addition to moving video."

TeleCruz claims it is the only company with an open platform capable of supporting the popular TV services at a cost suitable for mainstream televisions.

A privately held company in Silicon Valley, TeleCruz has raised over $69 million in investments from Kavanaugh Media Funds, Oakmont Corporation, Sands Brothers, Gemstar International, Zeron Group, Institutional Venture Partners, Crosslink Capital, and Fujigin Capital (Fuji Bank of Japan).

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