Somewhere in the sky between Amritsar and Toronto, Suneet Singh Tuli has just finished an in-flight vegetarian meal and is preparing to get some sleep. He is in first class, the only way the 6-foot-2 Brampton, Ontario-based businessman can accommodate a gruelling travel schedule that sees him require a fresh passport every 18 months. Before he drifts off, though, he picks up his copy of The Economic Times of India to catch up on the news.
And there, buried in its pink pages, is where he sees it: A tiny news brief announcing the Indian government’s extension of a contract tender to build an ultracheap tablet computer for the masses. Suneet, the 43-year-old CEO of a small Canadian wireless device maker called Datawind, knows immediately what this means. India, a country of 1.2 billion people, has the fastest-growing mobile market on the planet. More than 800 million people in India have mobile phones and more than 10 million are signing up each month. Yet the number of Indians with regular access to the Internet is shockingly low: about 10%. The Indian government is banking on a nationally subsidized mobile tablet to help pull millions of its disconnected citizens online and into the modern economy. For entrepreneurs like Suneet, who focus on low-cost digital products for the disenfranchised, markets like India (and China, Asia, Africa and Latin America) are what’s referred to as the “next billion.” And they are huge.
As soon as his plane touches down in wintry Toronto, Suneet flips open his laptop to Google the Indian state’s desired specifications. They are almost identical to those found in a super-affordable tablet that Datawind is designing at its Montreal office. “It was eerie,” Suneet recalls. “The specs were so close.”
And so Suneet resolves to embark on what would become his Great Game, a grand contest of empire-building proportions: to engineer, construct and deliver the world’s cheapest tablet computer to the Indian government. It will have to be mass-produced, mainly on the subcontinent—its cost subsidized for tens, perhaps hundreds, of millions of Indians. If he succeeds, it could vault his tiny company from obscurity into the big leagues of the global wireless industry. If he fails, Datawind will stumble back to the minors. It is Jan. 30, 2011. The Indian government’s deadline for bids is Feb. 14.
That leaves Suneet just two weeks—an impossibly short time frame in which he first has to convince his tight-knit board of directors, who have always done everything by consensus, that this unprecedented opportunity outweighs the risks of wading neck deep into the unpredictable Indian market, where everything seems to be cobbled together by red tape and bureaucracy; then, he will have to gear up to build 100 functioning test units of a tablet computer that, at this stage, exists only in design and scattered components; and, finally, get those tablets and himself to a dusty outpost in the deserts of Rajasthan, where his efforts will likely be blown apart and buried under the quick-shifting sands of India’s chugging, clanging, modern industrial economy.
Two weeks. Not exactly a lot of time.
Datawind’s main office is located in a bland concrete tower block on René-Lévesque Ouest in downtown Montreal. There’s no sign of the company in the building lobby. The only indication of Datawind’s presence is a white sheet of paper taped to an 11th-floor door that reads, “Datawind Net Access Corporation.” Even that had only been posted for the benefit of a visitor. Behind the door, around 50 of the company’s 150 employees—many of them engineers—toil and tinker with motherboards and mobile operating systems.
Datawind was founded in 2000 by Suneet and his bother, Raja, who is two years his senior and holds the title of chief technology officer. The pair have had modest success building and selling wireless devices like the PocketSurfer (a small, clamshell mobile device) and the UbiSurfer (a mini-netbook), mainly in the United Kingdom for use on Vodafone Group’s network. The company has an office in London, and another in Amritsar, in the northern Indian state of Punjab, where it operates a call centre and handles some engineering, testing, accounting and HR duties. Although Suneet and his brother are Canadian citizens—born in India, they arrived when they were 12 and 14, respectively—Datawind is registered in the U.K. Suneet says this is largely because of Canada’s notoriously conservative venture capital market, the U.K.’s funding support for innovation and the fact that Canada’s wireless industry—dominated by just three companies—has had little incentive to supplement its own high-margin smartphones with the kinds of inexpensive Internet devices Datawind designs.
But even though Datawind’s business model doesn’t really fit the Canadian market, its products are perfect for India. There, land-line infrastructure is practically non-existent, and desktop computers and laptops are not widespread. Mobile devices like Datawind’s offer the best hope for bringing broadband Internet to India’s citizens. While companies like Apple, Samsung and Research In Motion have focused their attention on upper-middle-class consumers and business clients with $500-plus devices, executives like Nokia’s Canadian CEO Stephen Elop are touting the potential of the world’s next billion Internet users. What emerging markets fail to offer in profit margins, the thinking goes, they’ll make up for in volume. Moreover, connecting this massive untapped market will do more than help bring developing countries online; it will give early market entrants a competitive advantage over global tech leaders like Apple.
Convincing Datawind’s board of directors to pursue the project means first convincing Raja and their 76-year-old father, Lakhbir. The current plan, as far as the board is concerned, involves slowly advancing into the U.S. and expanding in Europe. Raja sees the value in Suneet’s proposal, even though it will mean sacrificing weeks of human resources and management attention at a company too small to take many big risks. Like Raja, their father, who had previously run construction businesses in India, Canada and the Middle East, comes around to the idea quickly. But one director in Hong Kong is steadfast in his opposition. Datawind is already trying to bring a similar device into the commercial market. Why waste weeks on a government scheme in India, where contracts are known to be violated and contested, and the backlog in the courts is measured in years? Why put Datawind’s plans on hold for what is essentially a Hail Mary? Suneet pushes, but there is no give at all.
“I threatened to resign,” he recalls.
But, really, there is no time for that. While the company has always operated by board consensus, Suneet nonetheless asks Raja to start preparing prototypes.
Behind the paper sign on the door, and down a hallway lined with overflowing cardboard boxes, Datawind’s Montreal headquarters becomes a dizzying blur of after-hours engineering. It is the kind of scene more common to bootstrapping Silicon Valley start-ups than a decade-old company run by a pair of seasoned entrepreneurs who have already listed two companies on the NASDAQ. Technicians like Cezar Oprescu, a heavy-set Romanian who not only wears two collared shirts but two pairs of glasses at the same time (they double as a microscope), work in rotating shifts, some lasting more than 36 hours, at desks littered with soldering irons, spare computer parts, discarded motherboards and fast food wrappers. Their monitors flicker with the drip of neon green code that looks like something from The Matrix. While one staff member, seated at an impossibly cluttered desk, sets about re-engineering the piece of hardware responsible for receiving WiFi signals, a colleague, stationed just a few feet away, adjusts the software drivers that will interact with it. Elsewhere, programmers are still testing the code that dictates how the touchscreen user interface deals with the drivers.
The pace is unrelenting. Not only are employees ordering in dinner, they’re ordering in breakfast, grappling in real time with the allergies and dietary restrictions of an incredibly diverse staff of Eastern Europeans, Indians, Chinese, Russians and French Canadians, several vegetarians and one person who is allergic to green peppers.
Part of the difficulty in engineering such a device is that the underlying goal—that its final price should be within the means of those who can’t afford high-priced tablets—dictates crucial engineering and component decisions. A piece of high-impact-resistant glass, such as the touchscreen face of an iPad, can cost upward of $20. Datawind’s touchscreen glass, which the company had engineered down the street, costs less than $2, though it won’t allow for luxuries like pinch-and-zoom finger swiping. There were also compromises on processing power: Datawind’s 366 megahertz processor costs less than $5, a fraction of the $15-plus price tag on the chips that power iPads and other comparable tablets. And while the decision to run Google’s free Android mobile operating system on the gadget saves money, it requires coders to dig deep into the Linux kernel that underpins the software, tweaking it until it runs smoothly on Datawind’s weaker processor.
“We were trying to build the device while we were still designing it,” Raja later explained. To understand just how intense Datawind’s challenge was, consider that, in November, IHS iSuppli, a supply chain analysis firm, tore apart Amazon’s newest tablet, the Kindle Fire—one of the lowest-priced devices in the North American market—and tallied its components to a hard cost of $209.63 (this for a product that retails at $199 U.S.). Datawind was aiming to come in at a quarter of that.
It helps, oddly enough, that Datawind is executing this near-impossible task in Montreal: The city is a mecca for immigrants, and Raja proudly proclaims that his employees, many of them new to the country, had arrived with obscure skill sets that proved immensely valuable to the company. As the days tick by through a haze of sleepless nights, cold pizzas, problems and workarounds, the seven-inch device finally takes shape. The finished tablets are carefully packed in boxes, one by one, and prepared for shipment to Indira Gandhi International Airport on the outskirts of New Delhi.
On a morning only a few days before the Indian government’s Valentine’s Day deadline, Kuljeet Singh, Datawind’s head of operations in India, makes the drive out to Indira Gandhi to pick up the tablets. The company has some experience doing business in India, having used the country as a test market for other products. The Tuli brothers had also long since hired local staff—and still had some family in the country. They knew, for instance, that the customs process in India can be unpredictable at best, and a nightmare at worst. Sometimes, shipments come through in a day or two; other times, they are held up for weeks.
Still, this day is special: Singh is not here as a lowly businessman; he is here by grand design—practically by government decree—to receive goods for a scheme that is designed to benefit the People. At Indira Gandhi, Singh morphs from Datawind’s main man in India to a type of soothsayer, spooning out prophecies to the harried customs officials about the tablets’ enormous potential. “I told them this was a project for the government,” Singh says, “that it would go in every house, even the guy earning 5,000 to 6,000 rupees per month”—about $100—“that they can have this….They got really excited.”
The shipment is received without hassle, and Singh loads the tablets into his Toyota Innova minivan to begin the 10-hour drive west, out of Delhi’s broad, chaotic avenues and into the deserts of Rajasthan, en route to Jodhpur, where the bidding process is set to take place. Singh doesn’t know, at this point, that there is still no board approval to do any of this, that a lone director in Hong Kong has yet to sign off.
Suneet arrives in Jodhpur, an ancient city of forts and palaces, on the afternoon of Feb. 13. He checks into the Hari Mahal, a hotel designed to resemble an ancient castle, and spends the evening on the phone with the company’s director in Hong Kong, who remains convinced Datawind will lose the contract and is wasting precious time. With nothing settled (the director will quit a few weeks later), Suneet goes to bed.
Bidding begins the next morning at a half-built university campus outside the city. The anxiety of the first day is taken over with mundane officialdom: the examination of incorporation documents, validation of financial statements, ensuring everyone’s $100,000 (U.S.) bid bond is in place. It is on the second day that things get interesting. Suneet is sequestered along with 14 other bidders, represented by about 20 or 30 people, in an antechamber with couches and coffee tables. As he awaits his 45-minute slot to pitch a committee of bureaucrats and prestigious Indian Institute of Technology professors, he takes the time—carpe diem—to network. None of the industry giants is in attendance. Though Suneet heard that the Indian government approached Apple, Samsung and most other major tablet makers, he can understand why they might be hesitant to design a device that would surely slice their profit margins to ribbons. Nevertheless, Datawind’s $10 million in annual revenues are dwarfed by several of the other bidders. Geneva-based STMicroelectronics, for instance, hauled in $10 billion last year—roughly 1,000 times what Datawind did. Suneet makes his presentation, and it goes well. He is asked back for the next day.
In the morning, Suneet and the remaining three bidders return to the same room. At the front, a 12-person committee shows off the submitted tenders, time-stamped and sealed with wax, before reading off each company’s bid—including the lowest estimate of what it would cost to make the Indian government’s dream: the cheapest tablet in the world.
When the presentation is finished, Datawind’s price tag—$52—is the lowest. The next cheapest bid is for $64. “I went white,” Suneet says now. “I thought, ‘We’ve missed something.’”
Feeling nauseous, he staggers out into the antechamber, where rival bidders lob wisecracks in his direction. “At that price, we’ll buy some,” one businessman says, laughing. Frantic, Suneet calls Montreal, where it is nearly 3 a.m., knowing he’ll wake up Raja. But his elder brother, who at times forgets how many patents he has to his name (more than 50) but never forgets product specs, reassures him that the final price accounts for every single component in the device. That’s when it sinks in: They’ve nailed this.
When the media saw the mobile devices for the first time in October, the combination of tablets, international development and India made an enticing tale. The Tuli brothers were treated like rock stars. In Canada, it’s easy to draw comparisons to Mike Lazaridis and Jim Balsillie, the famous co-CEOs of RIM: Raja, the brilliant, details-oriented engineer, and Suneet, the globe-trotting salesman selling not just a product but a vision of the future. When I met Raja in November, it was clear he sees it too: “RIM was a start-up once,” he told me.
So far, Datawind has manufactured about 10,000 of its ultracheap devices, and has subcontracted more factories in India to gradually churn out a volume of tablets that still seems unbelievable to the founders. The Indian state plans to subsidize the tablets down to between $20 and $35 (U.S.), to be sold to college and university students, and wants to roll the devices out to around 12 million users over the next 12 months. After that, the goal is to place one of these tablets in the hands of each of the country’s 80 to 100 million high school students. The process, despite the hype, is still in a nascent stage, unfolding slowly.
But things got stranger. Shortly after the announcement, Suneet was invited to meet with Thailand’s Minister for Information Communications Technology (who was so interested in purchasing 10 million tablets that he attended their meeting even as flood waters descended on Bangkok). Calls arrived from Turkey (which wants 15 million tablets), Sri Lanka, Trinidad and Tobago, Panama and Egypt. At one point, the Swedish embassy in Canada called: Would Suneet possibly have time to meet the Swedish foreign minister, Carl Bildt? And would it be possible to send out a press release to announce that the meeting was happening? “Why are you asking me?” Suneet asked them, flabbergasted.
Later that month, Suneet is on another Delhi-to-Toronto flight when an Indian woman suddenly goes into labour. A pediatrician is on board and delivers the baby girl in mid-flight. The parents name her Aakash, the Hindi word for “sky.” It is the same name the Indian government decided to give its tablet—a startlingly hopeful device, a computer designed to connect more people to the Internet than ever, that might one day put Datawind in the rarefied air of other Canadian tech pioneers.
Source:http://www.ctv.ca/generic/generated/static/business/article2282337.html
