Photon: Betting on next gen tech

Srinivas and Mukund Balasubramanian are two successful entrepreneurs who have moved from the US to India and are now are part of the Web 2.0 revolution.

Srinivas Balasubramanian, 33, is the CEO at Photon while Mukund Balasubramanian, 30, is the CTO.

This duo is brothers turned business partners. In five years, they intend to make Photon the world’s leading internet consulting firm providing innovative business solutions for its customers.

The voyage began with Mukund’s research thesis at the Stanford Entrepreneurial Challenge. He managed to put together USD 7 million to start their first venture Infravio, a web service and SOA infrastructure company in 2000. It wasn’t a flyer of a start as the dotcom bubble burst. But Infravio managed to survive. But when the tide turned the brothers were ready to take off. In 2006, they sold Infravio for almost USD 40 million to webMethods.

With the experience they gained, the Balasubramanian brothers took the opportunity to plunge into their next entrepreneurial venture.

Mukund: Photon was actually started a fair time ago for serving dotcoms. For the initial phase, we serviced dotcoms. It went through its throes and dotcom bust, and today what we do is pretty much the same in all its new glory.

When you say you service dotcoms what exactly do you do?

Mukund: We created e-businesses platforms. The difference between a business and an e-business is that most transactions actually flow electronically. Each and every piece of software will incorporate infrastructure as a cost saving measure. In e-business, it is actually a revenue generating effort. There are a lot larger budgets and it is possible for you to grow a company to enormous sizes like a Google and a Yahoo! overnight. That is what e-business enables you to do. We create platforms to enable those using technologies like open source and service oriented architectures. This is what Infravio was. For example, Web 2.0 is like this new technology wave sweeping the US Internet community and very soon India.

Photon is a result of Mukund’s technical skills and Srinivas’ financial management style. With half a dozen degrees from IIM, IIT, Bates, and Stanford between them, the Balasubramanians bet on Photon, an Internet consultancy company, based out of Chennai, Boston and Silicon Valley. Photon now boasts of 450 clients, more than 1,000 employees, and revenues over Rs 100 crore.

Q: How do the two of you split responsibilities and areas of operation? Has there even been friction between the two of you over who does what and so on?

Srinivas: The good thing about us is that we actually bring very different skills to the table. I have never personally written a single line of code in my life. I am from the financial services industry and was a trader before that. So, fund raising, company sales, and capital structuring are what I do.

Q: So, you are the tech guy?

Mukund: That is a stereotype that I have actually learnt to live with. I give that to my customers as well.

Q: There is a lot more to that?

Mukund: That is the reason I still wear the hat of a CTO because my customers expect to speak to a CTO. I continue to be technologically focused. It is not like I write code anymore. I help in a lot of the sales, I run a lot of the Indian operations, which is why I am located here. That provides a natural split. We have been working together for who knows how long.

Srinivas: We know a lot of great people working with us as well. People whom I know and trust. My best friend from my college works as our Chief Operating Officer. One of my best friends from school, who actually is a chartered accountant, rank holder, and the likes, works as our CFO.

Q: So, it is a friends and family network?

Srinivas: It makes it fun.

Mukund: We like to think it is a professionally run organization. That is the first thing we disclaim. We are brothers, but this is not a family run concern. That is one of the reasons why we keep talking about professionalism and going public. We already have the discipline of running it like a public company.

With clients from Fortune 500 companies to small and medium enterprises based mainly in North America, Photon is looking to expand further into Europe and Southeast Asia. The next step is to move on to the next generation of Web 2.0.

Srinivas: The whole move towards the second generation internet, this whole Web 2.0 and the like, is just massive.

Q: And sustainable this time around?

Srinivas: I certainly think so, because there has been no sign of frenzy. There are some signs of pigs beginning to fly. But it is a long way from the frenzy that was in 1999-2000.

And this time around the value to the business seems to be very real. Open source software, service oriented architectures, component based architectures, and this whole move towards Enterprise 2.0 and the mode of collaboration they all seem very real. There is a lot of value being created within the enterprise. And there has been such a large technology drought in the US that virtually enterprises stopped buying software from 2001 to 2005. There is a lot of buying happening once again in the technology space.

Q: How much of a concern is the subprime woes and US economy slowing down?

Mukund: At this point, we are taking calculated risks. But our bets are purely on technology, specifically next generation technology, and internet consulting which tend to be safe.

Q: What is the size we are actually looking at because you have over 1,000 people working for you?

Srinivas: We are about 1,200 people now. Our revenue run-rate is over Rs 100 crore. We declared our profit numbers of Rs 25 crore in March. We have doubled every year consistently. We may not double this year because of the rupee-dollar exchange rate.

Q: How much of a worry and a concern is that?

Srinivas: We took a bad knock with all our clientele being North American and all expenses in rupees. We certainly took a bath this time on that.

Serving up an IPO by next year, Photon is hitting ace after ace in the internet and e-business space. Placing their bets on the Indian markets for now, even with the disadvantage of an appreciating rupee and a slowing US economy, these young turks are netting up profits making Photon a smash hit.