Guest: Parag Naik - Co-founder & CEO, Saankhya Labs
Episode Summary:
What does it take to build a deep-tech semiconductor company from the ground up in India? How does a founder navigate the challenges of patient capital, ecosystem gaps, and global competition while staying true to a long-term vision?
In this episode of Chai & Chips, I sit down with Parag Naik, a tech legend, serial entrepreneur, and the Co-founder & CEO of Saankhya Labs. Parag offers a rare and candid look into his multi-decade journey, from naming his startups based on Sanskrit philosophy and KSRTC buses to building globally recognized technology. He unpacks the real-world challenges and immense opportunities within India’s semiconductor landscape, providing a masterclass in resilience, innovation, and the spiritual side of entrepreneurship.
This is a must-listen for anyone building, investing in, or curious about the future of deep tech in India.
YouTube episode link:
Key Insights & Takeaways
1. The Founder’s Journey as a Crucible: Creativity, Resilience, and an Outsider’s Edge
Parag’s early life, marked by moving through six different schools and spending formative years on a farmhouse away from the city, was not a disadvantage but a crucible for creativity and resilience. He argues that a “stint in nature” is crucial for building imagination, as it forces you to keep yourself busy and think from first principles. This constant state of being an “outsider” fostered an ability to connect with diverse people and cultures, a trait that proved invaluable in building teams and understanding markets.
2. The Art of Naming: Identity, Vision, and a Touch of Serendipity
The names of Parag’s companies, Vayavya Labs and Saankhya Labs, are not just labels but reflections of their origin and philosophy.
Vayavya: The name, meaning “north-west” in Sanskrit, was inspired by a KSRTC bus from the “Vayavya” (North-West) division of Karnataka passing by during a brainstorming session in Belgaum. It was a conscious choice to embed a local, Indian flavor into their identity.
Saankhya: Often confused with “Sankhya” (number), “Saankhya” is a deep philosophical concept from the Bhagavad Gita representing knowledge and logic. This name reflects the company’s ambition to tackle complex problems from a fundamental, first-principles perspective.
3. The Four Pillars of India’s Chip Ecosystem: Strengths, Gaps, and the Path Forward
Parag provides a clear-eyed analysis of India’s semiconductor ecosystem, breaking it down into four critical areas:
OEMs (Original Equipment Manufacturers): A major weakness. India has very few OEMs building end-products, which limits the domestic market for chips.
Fabless Companies: Companies that supply chips to OEMs. This area is nascent but growing.
Manufacturing: The ecosystem is currently very nascent and will take the longest time to mature. While policy is helping, it’s a long-term game.
Design: This is India’s core strength. The country has a massive talent pool, and Parag believes a globally significant design company can emerge from India in the next 5-10 years. This is where the most immediate value lies.
4. The “Godfather Customer” and Patient Capital
A critical missing piece in India’s ecosystem is the “Godfather Customer”—a lead buyer who sees the potential in a 70% ready product and actively helps pull it through to 100% completion. Unlike in the US, where defence or large corporations often play this role, Indian startups struggle to find this crucial partner. This, combined with a venture capital ecosystem that has historically lacked the patience for deep-tech’s long gestation cycles, creates significant hurdles.
5. The Spiritual Journey of Entrepreneurship: Humility, Self-Discovery, and Purpose
For Parag, the startup journey is profoundly spiritual. It’s a path of self-discovery where founders confront their deepest fears and greatest strengths. He emphasizes two key lessons:
Living vs. Livelihood: Citing actor Dev Anand, Parag argues, “Living is primary, livelihood is secondary.” True entrepreneurship is driven by the passion for creating, not just the pursuit of wealth.
Power as a Test of Character: The best way to test a person’s character is to give them power. How you behave when you have leverage and success defines you far more than how you act during a struggle.
Connect with our Guest:
Saankhya Labs (acquired by Tejas Networks): https://www.tejasnetworks.com/
Parag Naik on LinkedIn: https://www.linkedin.com/in/parag-naik-38a5944/
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· Episode transcripts on Substack: https://www.prakashmallya.com/s/chai-and-chips-podcast
Episode transcripts on Medium: https://medium.com/@pmallya2411
Episode Transcript
Speakers:
Prakash Mallya (Host)
Parag Naik (Guest)
(00:00) (Intro Music)
(02:02) Prakash Mallya: Hi everyone, welcome to Chai and Chips. This is Prakash Mallya. Today we have with us Parag Naik. Parag is a legend, I would say. He is a tech serial entrepreneur. He’s the co-founder and CEO of Saankhya Labs that he has led since its inception in 2007. He didn’t stop there. He co-founded multiple companies before that. Most recently being the one that got acquired by Genesis Microchip, if I’m not wrong. And also before that, a company, a cool named company called Vayavya Labs. And we’ll talk about why he named Vayavya, Vayavya. He’s done tremendously, a great deal, I must say for semiconductor and hardware ecosystem in specifically Bangalore, the tech capital of the country. And he has 50 international patents to his credit that spans VLSI design, digital signal processing, hardware and software co-design, and several other areas. So, he is truly a tech entrepreneur and semiconductor entrepreneur as deep as they come. So, welcome to the show.
(03:15) Parag Naik: Thank you. Thank you, Prakash. Pleasure.
(03:17) Prakash: Yeah, it’s an honor. It’s completely mine.
(03:21) Prakash: Yeah. So let me start with what I talked about in the introduction. All your ventures have had very unique names. How did that come about? Is there a common thread that binds all of that together?
(03:34) Parag: Yeah, actually we wanted to give a local flavor, right? We didn’t want to... so if you look at all these Taiwanese companies, they have, they have this tech and all these names in between. So you wanted to give a very Indian flavor. So that’s the common theme. The first company that we had like you said was Smart Yantra. Right, Yantra is of course machines, smart is Yantra. And then once we got acquired by Genesis Microchip, and then when we served out our period there and then came out to start Saankhya and Vayavya together. Vayavya, there was a very interesting backdrop. Vayavya was a very interesting experiment, I would say. So, most of our ventures have been experiments. We never look at it as, you know, ventures because we are trying to do something crazy. All we said to ourselves was, let’s figure out, you know, it’s like, you know, I am fond of giving cricketing metaphors. You know, when you are out there, you just don’t look at the scorecard, right? You just play through sessions, especially when you’re playing test matches. Play through a session. So just play through a couple of sessions and then we’ll see what happens. With that intent, we started Vayavya way back. There’s a scheme called Beyond Bengaluru right now started with the Karnataka government about, about five years back. In 2006, we started Vayavya in Belgaum or Belagavi as it’s called right now. So, we wanted to give a local flavor to that name of the company that we are forming. And we came up with all kinds of names, Belgaum Tech and then some local mountains and local deities and stuff like that. Flowers around that. And then there was a KSRTC bus passing by. And just then, I think a year before then, you know, KSRTC had broken up into three different divisions within Karnataka. The Northwest division was called Vayavya. Vayavya means northwest in Sanskrit and in Kannada. So, we said that name seems, there’s a nice tone to it and it stuck. So, it’s actually easier to pronounce when it is written in Kannada or Indic languages. In English it is a little bit difficult to get the things right. That was that with Vayavya. In Saankhya also, we wanted to give a local Indian name. Saankhya was not my name. My co-founder Vishwa came up with that name. So Saankhya could actually mean digital in Sanskrit. But at that time, we didn’t know. It turns out that it’s a philosophy. It’s a second chapter of the Bhagavad Gita and there’s a whole lot of, I would say, philosophical underpinnings to that name. Saankhya is actually a philosophy. There is a slight difference between Sankhya and Saankhya. People get that all wrong. Sankhya is number. Saankhya is a philosophy.
(06:20) Prakash: Very interesting.
(06:21) Parag: The only guy who has got it right, you know, and also knew its significance was a Japanese customer. He was a Buddhist guy, so he knew the meaning of Saankhya. Saankhya is actually one way of looking at it loosely is nirvana through knowledge or logic.
(06:40) Prakash: Very cool.
(06:41) Parag: So we started to use that later on.
(06:45) Prakash: So you talked a bit about Belgaum, now Belagavi. You came up, your early life was in that town, which is a small town. And from everything I’ve read about you and listened to what the sessions you have done in the past, you have more of a, I would say a small town or I would say understated mentality and then trying to break through. Is that true?
(07:15) Parag: Actually no. You know, my initial childhood was in Bangalore. So I am quintessentially a Bangalorean. So I stayed in Belgaum only for about 12 years. Most of my life, almost 40 years of it, I’ve been in Bangalore. Malleswaram, so mostly there.
(07:33) Prakash: So when to when were you in Belagavi?
(07:34) Parag: I was in Belgaum between 1981 and 1992. Just 11 years. But then somehow in those formative years, you made so many friends, you stuck with it. So, for some reason, off late especially, you don’t identify yourself with Bangalore. I mean, the way it was when we were growing up to the time it is now, it’s very different. So, my early formative years were in Bangalore. I went to school in Malleswaram. Then our family shifted to Belgaum. My father shifted to Belgaum and that’s how the thing with Belgaum stuck. And because I have got a lot of friends, I somehow over a period of time started to identify with it more than, unfortunately with Bangalore. Stickiness with Bangalore is much lesser. Much lesser than there.
(08:19) Prakash: And has that shaped the kind of risks you took or your philosophy?
(08:24) Parag: So, one of the things is, you know, I think if I recollect right, I went through six schools. I was not, my father was not in the army or you know, in defence forces. So you are constantly yanked out of your comfort zone. So that’s one of the things that shaped me. At those times, you know, you’re always an outsider everywhere. I keep joking that, right? So I was just telling, we were having this conversation in one of our groups the other day when there was a nice article on Rajinikanth on his birthday, I think about a month back. So I said, you know, I’m a half Marathi, half Marathi Kannadiga, living in Bangalore, speaking Kannada, working in semiconductors. So which means you know, I can try a shot at the Tamil film industry, right? He was a conductor, we are in semiconductors, so we are close. So, that way, that kind of defined our personality a bit. Also because you’re an outsider everywhere, in Bangalore and in Belgaum. The North Karnataka region if you look at it, right, it’s pretty unique in some sense. It’s got its own culture, culturally closer to a bit to Maharashtra than to Karnataka this side, right? And, if you look at the depiction of the North Karnataka guys, they’re always caricatures, right? In Kannada movies and in Marathi movies, you end up being both jokers. There are always jokers because the Marathi guys think you don’t speak Marathi, the Kannada guys think you can’t speak Kannada, right? So it’s like.
(09:54) Prakash: You’re good at nothing.
(09:55) Parag: You are good at nothing. And yet, if I look back, that helps you becaus innovation and things happen when you are at a cusp of multiple, diverse opinions or diverse cultures. So we grew up with, because you had Goa border and then there’s a bit of a Goan influence, there’s a little bit of this old Catholic, Portuguese influence on all of it. So you have a bit of a mishmash of everything. That actually did shape to an extent our personality, the ability to connect with people. But also, because you’re yanked out of your comfort zones, now looking back, I can say that was really good because you know, I’m never in a comfort zone, always out of the comfort zone. Every three years you’re out somewhere, right? So you have to go, build a new life so to speak, new friends and stuff like that. So technically, I have friends everywhere. And because of the stint in Bangalore and in Belgaum, I speak multiple languages. Because at six or seven, I was already speaking four. Because my mother is Marathi, my father is Kannadiga, so we spoke Kannada to my father, Marathi to my mother. So we speak both those languages. Of course, Hindi you picked up and English you have to. And then because you’re in Bangalore, you speak a smattering of Tamil and you know, you know a little bit of Telugu here and there, right? So that also gives you a unique advantage because one of the things I’ve seen with people is you open up on their languages, especially in a foreign country, you bond much better.
(11:28) Prakash: So how many languages do you know now?
(11:30) Parag: Actually fluently I speak four. Then well, different dialects by the way, I can speak Marathi in different dialects and Kannada in different dialects depending on the region I am in. I can switch dialects between Belgaum to here. And then I speak a little bit of Tamil. I can manage. I can understand most of it. In fact, once I’d gone to Chennai, I think I’d gone to Woodlands hotel, right? And I ordered stuff in Tamil. The guy responded back to me in Kannada because that accent is very visible, right? So the guy, I think the Woodlands guys had shifted to probably, you know, to Chennai way back, so they know Kannada in our team. And I also understand Dutch a bit because I was in Holland for two years, two and a half years. And then because you know Marathi and you, we had a lot of Gujarati friends, Gujarati is also pretty easy to pick up. Once you know Marathi and Kannada, there’s a lot of other languages you can do if you are tuned to it, right? If you’re tuned to listening to languages and you don’t have to be always right. If you’re a guy who’s very purist, then you won’t speak any other language because you’ll never pick up languages. So coming back to your question, because you’re yanked out of it and also when we went to Belgaum, we lived away from the city. We lived in a farmhouse, right? So, a lot of times because we don’t have TV, this is pre-TV days and just the radio at best you had for watching, for your listening commentary. You had time by yourself. You’ve time with nature. And once you are, you know, in nature, I realized that, and I think everybody should have a stint in nature early on in their childhood because it builds your imagination.
(13:13) Prakash: It shapes you.
(13:14) Parag: It shapes you. Because you have to keep yourself busy. The imagination aspect of it actually helped me later on in my career a lot. And then also because of sports, I was also a very avid cricketer. Yeah, I did and I’ll tell you some of it as we go along. That resilience came in to an extent. Because in our education system, at least during our days, it’s true even now, the only place where you could fail and you can still fail gracefully is in sports. And then you know when you’re playing, playing a team sport that, you know, you can win from losing positions and lose from winning positions. So winning and losing is not part of it. So that builds in that bit of a resilience. Because in the education system, once you fail, you’re done. You’re a duffer. That’s a problem that we have. That, that shaped me, you know...
(14:01) Prakash: So creativity, imagination, and resilience.
(14:05) Parag: Resilience. Curiosity also, right? You’re curious about everything that goes around.
(14:10) Prakash: Yeah, of course. So combine all of that, what made you pick a path on semiconductors versus software and services which India was known and growing up, obviously that would have been a bigger priority for most. Why did you choose a different path?
(14:24) Parag: Well, actually, we have always been a motley crazy bunch, right? I mean, everybody says that about their own batchmates or their own gangs, but we were a bit of, I mean, we were very rebellious to an extent, to a cause or maybe rebel for the sake of rebelling also at times. But when somebody said something is not possible, we’ll exactly show him that it’s not, it is possible, right? Part of it is that, that a bit of a rebellious attitude and defiance. And part also because you love doing it. Right? Once you love what you do and you’re in company of people whom you like, nothing matters actually at the end of it. I mean, of course, you got real world issues like putting food on the table, to four square meals a day. But beyond that point, if these two things are taken care of, right, you will do what you like to do the most. And in your natural state. And once you do that, it just becomes a, it doesn’t become drudgery, right? That’s the reason we chose semiconductors. Also, we’ve always been fascinated with technology, right? Since, since very early on in my career, in fact I worked for the Tejas aircraft in 90’s, between ‘93 and ‘95.
(15:40) Prakash: Yes.
(15:40) Parag: So, there was, there was that exposure to embedded hardware, a lot of exposure to embedded software as well. And I think India was just opening up at that time. And post Smart Yantra, which was our first company, we got acquired by a semiconductor company there. And then we got up close and saw how, how it was operated. It was a well-based company, one of the hottest companies at that time. And then we realized if they can do it, we can do it too. So, that’s the reason, and also the inherent curiosity and the love for the subject.
(16:15) Prakash: Yeah, that was the motivation.
(16:16) Parag: That was the motivation.
(16:17) Prakash: That to prove people wrong that it can be done out of India.
(16:22) Parag: Yeah.
(16:23) Prakash: So you started on that journey and across all companies, you have redefined, you have done software-defined radios, direct-to-mobile broadcast. How did you come about conceptualizing this idea and converting that into a viable business over time?
(16:42) Parag: Actually, some of these are, I mean, most great findings or inventions are accidental, right? They just happen because you’re in there long enough and curious enough and trying to figure out things from first principles. I think that’s something that we have followed always in all our companies, attack problems from first principles. So, if anybody throws jargon, is I think bullshitting. So, once you do that, you will, you will come upon something that is, that is very interesting because most people, I think there’s this thing called Price’s Law, which says that I think, I don’t know, Price or something else, but the gist is only a square root of the employees actually work in a company. Truly, really work. Everybody else is just parasitic stuff. I have a law which extends that, which is saying that, you know, within an industry, only I think the eighth root of the people do any original thinking. Or even, even lesser, right? Everybody else just follows the trend. Somebody says AI, everybody says AI, right? So it’s how well that gets marketed and things like that. So people don’t go back and look at first principles things. Once you start to look at first principles things, you realize that there are a lot of things that can be done better, optimized better or thought through better. And that’s how the first company and, I mean, the first concept that we spoke about, software-defined radio, was born. It was esoteric technology in 2006 because most hardware designers we spoke to, IC designers, says it’s impossible to, you know, do stuff in programmable hardware, building modems just like the way you do, you know, just like the way you do software on custom DSPs. So, that was one of the drivers. The other driver also, because it was a bit difficult and it was maybe seven, eight years beyond, right?
(18:48) Prakash: And people were thinking about what is possible based on what they saw today.
(18:51) Parag: What they saw today. And that’s one of the challenges I’ll tell you in the Indian ecosystem we have, right? That you, you can’t think 10 years out. Nobody, I mean, I keep saying this, you know, most entrepreneurs, I mean, seasoned ones at deep tech entrepreneurs who are looking forward or are generally it’s like they are like a protagonist of a horror flick, right? So you see ghosts in the beginning, nobody believes you. Then they’ll give you electric shocks, right? Only in the end, they’ll say, “Oh yeah,” and then they get the exorcist, right? So that’s the problem. You see ghosts that others don’t see. And explaining those ghosts to these people, to investors is very difficult. And therefore, you need to be a brand by yourself to be able to, you know, convince it, saying that, you know, I want to go build a, you know, I want to build an electric car and make it the best in the world. Well, it’s a 10-year process, right? And people will think you’re crazy. So when we started software-defined radio, we had two challenges, right? One was within the industry saying that it’s an impossible thing to do. And then within the Indian ecosystem, like why, can we even build semiconductors in India, right? This is not the Indian story. We should be selling books or, you know, underwear and banians like they said on the internet. Why are you doing this types? But the real genesis of that idea came in when we were inside, inside Genesis Microchip, where I was working, me and my team were working with the CTO’s office. And communication technologies were just kind of taking off to an extent.
(20:19) Prakash: And which year are you talking about?
(20:20) Parag: This is 2004. 2003, 2004, right? 2004. So, if you look at the communication, you know, history of communications, and history of the communication standards. So, you have a clear distinct era between 1920s when it was invented, 1900s to about 1960s or 1970s, when you had two or three standards. You had AM, FM, and you had TV standards, PAL, NTSC, four or five and mostly military standards. And military used to dominate all the communication technologies, right? Post ‘70s and ‘80s, the shift started with the rise of digital with Moore’s law on the back of the Moore’s law, you could start to build more complicated signal processing architectures on, on transistors, on chips, that you couldn’t do earlier. And then you had between ‘80s and, and about 2005, 2006, when we started Saankhya, you, there were about 15 to 20 standards. Four standards for satellites, terrestrial TV, you had FM, you had, you had 2G, 3G just coming up, 4G was still in the works. Then you had Wi-Fi, 11b, 11a, 11b, all those standards. Maybe about 25, 30 standards. What we realized was as you go on the back of the Moore’s law, right, as the Moore’s law kind of takes you off and you get more and more compute in chips and compute becomes available, more things become programmable. So, we envisaged a scenario where you could have hyper-personal waveforms, which is basically based on what you see in time, what RF signal you see in time and in space, you can change the RF signal. So, to implement that kind of a vision, you needed something that was programmable. And hence software-defined radio. At that time, software-defined radio was a military technology, but we took it to the consumer domain. I mean, it was meant to be very fat, you know, big pieces of hardware costing you a few thousands if not tens of thousands of dollars to make. We brought it down to, you know, about $3 or $4 in the consumer world.
(22:34) Prakash: Wow.
(22:36) Prakash: Like, when you say that, it is uncanny how much the US semiconductor industry owes itself to the US defence.
(22:44) Parag: Absolutely.
(22:44) Prakash: Most of the semiconductor companies started off there.
(22:47) Parag: Absolutely, absolutely. And in fact, you know what, that and one of the challenges that we have in India, right, is not talent, or even companies or even capital is a big challenge. But even now, capital is not a challenge. What you lack in an ecosystem is a, is a godfather customer, I would say. A godfather customer is the right word, right? The customer who sees potential in you, who sees a 70% ready product, pulls it out of you and takes it to 100%. And that’s what the US has been very successful at that. The buyer also has to be equally competent. To be able to pull that technology out of you. And should have that, have that vision to do that. That is seriously lacking in India. Because you’re too, too much quarter-focused, so that becomes a challenge.
(23:38) Prakash: And what could you do to change that status quo?
(23:42) Parag: Ah, good point. I think time also a few successes will help. You know, once Infosys succeeded, there, there was a whole slew of software guys, software services companies that succeeded, right? You need a real big success and then I think it will follow. And I think also, during our times, we had, we were growing up in a fairly socialist, resource-constrained time, right? I mean you had trouble getting two square meals a day and just living your life by was tough. So, I think now people have gone over that financial constraint. They are, they can think and they do what they love and stuff like that, right? Kids these days can do that. So, I think once that generation comes up, they will start to, start to look at long-term solutions.
(24:37) Prakash: Yeah.
(24:37) Parag: And also the incentives, I think in the country are not, not aligned to any long-term thinking. Very little. Everybody needs to see constant progress, right? And in some of these businesses, you can be just lying dormant for years, if not decades, and then suddenly out of nowhere you just take off.
(24:57) Prakash: Yeah. Fair point. Yeah.
(25:00) Prakash: And one part I feel to change the status quo would be innovation.
(25:05) Parag: That’s true.
(25:06) Prakash: And nobody can talk about innovation better than you because you have 50 patents to your name. So what does it take to drive innovation in any organization and how can you push it through your organizations, across a set of diverse teams you have led? What have been your learnings?
(25:24) Parag: My first fundamental learning was, you know, nobody likes to think long-term. Even engineers don’t like to think long-term. There are very few people who are comfortable... I mean, I was fascinated by this English mathematician who proved the Fermat’s theorem in the ‘90s, right? I don’t get his name, I think Arthur something. Okay, whatever. So, he said, the things that he said really stuck with me, right? The difference between a professional mathematician and an amateur mathematician and normal people like us, right, is that a professional mathematician can get stuck on a problem for years, for years without getting mad. Do you have the patience and do you have the persistence to stay focused on a problem for 10 years? I think we don’t have that, right? Once you stay in a problem for 10 years, if you’re of slightly above average intelligence, you will come up with something. That’s what you have to give first that time, the timelines have to change, right? We look at too short time windows for success. That’s one. And for innovation, I think fundamentally, it’s like water, right? You have to have all kinds of ideas strike each other. And for that, you need to be liquid, a little bit liquid in your thought processes. You have to be, in our cases, I found out that you have to be comfortable with yourself and comfortable with the group that you’re talking with, with very little ego, right? You should not feel, you should not feel, you know, egoistic or stupid enough to say, blurt out something which, which you think might be, might sound foolish, but you don’t. That comfort is very important. And, I also think to an extent, you know, the buildings that you stay in, right? If you, they are not architected for innovation, right? It’s most like factory kind of environments. And that is also a challenge, right? If you out, go out on long walks, when we started Saankhya, we actually started Saankhya in Manipal, by the way, not in Bangalore.
(27:32) Prakash: I didn’t know that.
(27:33) Parag: Yeah, it was in Manipal. So we would go out on these long walks in the evenings together. And just discuss stuff, right? And then suddenly out of nowhere, you know, something comes up and then you dig deeper in. That’s how you could do. And then also, you need to have somebody in the group has to have a little bit of imagination. That’s important, right? You have to break free from this and then think literally without any shackles. And a few years out. A few years out. Thinking about how it will go forward, what will look like. One of the key things that we identified then, and that forms the basis of what Open RAN and O-RAN and all of these are today, is the fact that everything has to get programmable.
(28:18) Prakash: And you talked about this specifically in some of the other interviews you have done is the absence of politics and how you have tried your hardest to achieve that.
(28:30) Parag: Well, when there are few people, there’ll always be this politics. You can only minimize it, like, minimize it to a bare minimum. And you have to have people who work each other and who can, can actually think through, right? I mean, we exactly know what the other guy is thinking. So that helps to an extent. It becomes an echo chamber sometimes, so you need to throw in some randomization at times. But by and large, when you’re comfortable with each other, you can, you do that. And then like I say, zero or minimal politics.
(28:57) Prakash: Yeah. So true. Yeah. Very, very true.
(29:00) Parag: And nobody is worried about who gets the credit for it. And that’s the key. If you have the thing of, you want to take credit for everything, you have one of the alpha males in the group, then it becomes a little bit of a challenge.
(29:10) Prakash: Harder. Yeah, very well said. So fast forward, you ran multiple startups. In case of Saankhya, you got acquired by Tejas Networks, which is a Tata Group company. How did the acquisition go? How did it come about? And did it translate your vision of semiconductor industry built out of India into reality or did it give you more responsibilities and opportunities moving forward?
(29:37) Parag: It’s actually both. This whole discussion started during COVID. I can say that now, I mean, we got a call from, we know somebody in the Tata Group and they reached out to us. And then we started to talk about it and we were like genuinely thrilled at that time, right? That somebody with real business knowledge is now really interested in us, because we are, we are written off as hobbyists, right? A bunch of guys doing something. Nobody knows what they are up to. And we had our own near-death experiences and all of that, right? Coming out of it, Tata coming in, that helped. The second thing is also, it opens up, when technology, when you want to build a business, technology is a necessary but not sufficient condition.
(30:20) Prakash: True.
(30:21) Parag: You need good operational efficiency. You need very good capital. So when you have capital, when good capital and operational, patient capital and operational efficiency meets technology, magic happens. Semiconductors especially. All three are very important. We, in fact, when we did Saankhya, one of the biggest learnings for us was, you know was how important operations is. People don’t realize how good an operational company Nvidia is, or how good, how thorough Apple is a better operational company than any other company in the world. On all operational metrics, they beat everybody hollow.
(30:58) Prakash: No wonder a supply chain expert...
(31:00) Parag: A supply chain expert.
(31:01) Prakash: Runs Apple.
(31:02) Parag: Exactly, Apple. I mean, you got to know that. And that’s something we used to discount in the beginning, right? Now we are much more cognizant of it and aware of it, and aware of how supply chain can kill you or make you sometimes, right? Supply chain, geopolitics of the supply chain can change your fortunes overnight. So that came about. And operations, especially for high volume semiconductors is key. I mean, the kind that goes on behind to ensure that we get these millions of phones manufactured every month is just mind-boggling, the kind of precision at which things have to work. So that’s become much more. And so when these three things meet is when you get a world-class company. Not just technology. So we now have a good opportunity to actually build a very powerful telecom OEM out of India, which is probably only the fourth country, right, other than the US and some European countries, China and us. We are the only ones who have the, you know, the heft and the operational capability to actually build something at that scale.
(32:15) Prakash: So you got a bigger vision based on all those three, capital, innovation, and as well as operational capability, all coming together. Very interesting.
(32:26) Parag: We were always capital-starved initially, in 10 years of Saankhya that we ran, though we raised a serious amount of money by Indian standards, we were always starved capital, from a capital perspective, because when you’re building out things in the future, you need a constant flow of money.
(32:43) Prakash: Especially in chips.
(32:44) Parag: Especially in chips, yeah.
(32:45) Prakash: They guzzle a lot of cash.
(32:46) Parag: A lot of cash, yeah.
(32:49) Prakash: So let me take a break from this conversation and take a bunch of questions on speed round. It’ll give you or our viewers a view of what Parag outside of work is. So, let me ask you the first one. If you could swap lives with an unconventional inventor, you can take real or fictional, for one week, who would you rather be and what would you build?
(33:19) Parag: I think it would be J.C. Bose or Brahmagupta was one of our, sorry, Bhaskara was who actually is actually the father of calculus. The work that he did actually ended up in what we call calculus today. Bose because he was a polymath and I think from being a botanist to the actual inventor of wireless. I mean, he’s the one who invented wireless, not Marconi. So Marconi gets the credit for it. And they did more or less parallelly. He beat Marconi much before that. What I would build? There are a lot of things. One would be a better lithography machine. I mean, that’s one of my, it’s an engineer’s dream, right? So I mean if you’re a true guy, you know now the kind of complexity that goes into building a lithography machine. And then of course, there are a lot of things that we do, you know, for our own internal smaller stuff for building 6G and stuff like that. Lithography, this, and probably I would, I would like to prove, in Bhaskara’s model that AGI is not possible with the way with LLMs. Prove it not anecdotally, but prove it really for a fact that it’s not.
(34:33) Prakash: Factually.
(34:34) Parag: Factually, yeah.
(34:36) Prakash: So what’s the most foolishly brave gamble you have ever taken inside or outside work?
(34:43) Parag: Oh, lots of them. But the most foolish one probably would be, I think, we had almost a, we had two near-death experiences in Saankhya, right? We almost came close to shutting down once in 2011, I think we ran out of money. And Intel Capital came in. And then in 2016, I think, 2015 or 2016, we had run up debts, we had run out of money. And we had no money to pay anywhere. So I brought in, I was I think 46 at that time. And we had exhausted all our reserves, whatever little reserves we had, right, as you can imagine. And I brought in about, without telling my family, about 60 - 70 to 75% of my last stashed away savings into Saankhya. That was the most foolish thing looking back I did. If it had gone the other way around, you know, it would have put my family at risk.
(35:44) Prakash: Brutal life of a founder.
(35:45) Parag: Yeah, yeah. It sounds very romantic. The reality is not.
(35:50) Prakash: Very true. What’s your favorite line from movies? I know you like movies.
(35:54) Parag: Yeah, one I have in the back of my office every time, which is, you know, it’s from Gabbar Singh, Sholay is my favorite movie. “Jo dar gaya, samjho mar gaya.” So that line, the guy who’s scared is gone, right? So that’s the adage that we live with and I keep telling people, shit happens, so...
(36:14) Prakash: That’s a favorite one?
(36:15) Parag: Favorite one.
(36:16) Prakash: True. So what’s one piece of bad advice you hear all the time as a founder that you secretly love to break?
(36:23) Parag: It’s not a secret, I’m very open about it. I think, no secrets with me. So, when I have been often told, you know, do sensitivity analysis on your business plan initially. I think that’s the stupidest advice that you can get. I mean, we’re just trying out stuff and you want, you want to build things and then go in and somebody comes and says, that Excel sheet, that number, change it and see what happens. That’s one. And anyway, I have very scant respect for the Indian VC ecosystem. I’m very open about it and they know about it as well, right? The kind of people they back, the kind of toxic leadership that you see, right? Scale at any cost. They don’t see some of these things you know. You don’t want to be a hamster on a wheel, right? You have to, like I said in earlier discussions, some of the stuff, at least that we do in our part of the deep tech business is a 15-year, 10, 15-year journey. We have very few people who have that kind of a horizon. That’s a challenge.
(37:20) Prakash: Fair point. Would you rather spend a day tinkering in a garage with no internet or giving a TED talk on global semiconductor strategy and why?
(37:29) Parag: I wouldn’t take that bet. You know, it’s why either or? I could do both depending on my mood. So sometimes you want to do that, sometimes... Very early on, right, this is one of the challenges you have as a technical guy. If you’re a pure technical guy, and you get out of your work, right? And you don’t do, you don’t sit in front of your machine, you don’t code, you don’t do a layout, you don’t come up with a new design, you think you’re not, that’s not work. So if you’re going out and meeting people, you’re trying to do policy changes, you think initially that took a long time for me to get over that hangover, that that is also work, that mindset that that is work. So, both are important. Both are equally important. It is not either or. And what I realized also is that a great scientist or a great engineer is also a very good salesman, though he might not admit it. You have to be able to sell your idea. And as an entrepreneur, I, it stuck me one day that we are actually far better sales guys than most people give us credit for and we ourselves give credit for, right? Because you’re selling constantly. You’re selling to investors, you’re selling to family, you’re selling to employees, you’re selling to everybody that you get. Without subconsciously knowing that we are actually selling it.
(38:40) Prakash: Which college day memory from Belgaum did you revisit the most when faced with a major technical challenge?
(38:49) Parag: Two I think. One is, you know, in college, we had evolved because we were in a private engineering college, we were not as competitive. Right? We collaborated much more. We had a group of about eight or nine people that would study, we had evolved this method of studying where, you know, each one reads something and explains to the rest of the group on what he’s understood. That actually is Shannon’s information theory. Which is basically when you have independent sources of information, you can add them up. So in a group, however smart one guy is, each one has a very different perspective.
(39:33) Prakash: Agree.
(39:34) Parag: So, it might look very different. And that’s why if you have people from diverse cultures, it’s easier, and that helps. That people think very differently. And if you give weightage to each one of them, the sum total of all of that is bigger than the parts, right? The whole is bigger than the sum part. So faced with any challenges, we generally have a collaborative thing. We make everybody talk about the issue and, you know, come up with the best way forward. A lot of times, the guy on the front, generally what happens is a problem is, you know, somebody in the CEO or somebody takes a call and it’s, it’s not true, especially in our businesses, the guy on the front, he knows the...
(40:14) Prakash: He knows the best.
(40:15) Parag: He knows the best. All he needs is, he needs his guidance, right? The way we have always operated in Saankhya is, you know, we are there to help you solve the problem. Right? We’ll help you with the problem, but we can’t, we won’t keep asking you, I won’t ask you, it won’t help me that, you know, I have a standup every half an hour. Typically, most program managers will come and say, “Okay, something is not working, there’s a fire.” Instead of checking a status one day, let’s check it half a day. Checking every 30 minutes doesn’t help. Right? It will only add more overheads. Asking him, asking that person, him or her, to see what we could do and giving them that cover fire, probably is very, very important is what we have learned when we really faced with technical hurdles. The second one I, I’ll give you a cricketing metaphor. I remember we, like I said, I was one of, you know, we had all, growing up, you always had this dream, right, of in India of being a cricketer, right? So that’s that always stays. So, we had this, I think it was one of those finals, I don’t remember which one it was. We were playing inter-collegiate or whatever. And we went into bat first, we were, it was a 40-over match, I think, I don’t know, 40 or 50-over match. And we got all out for 60.
(41:27) Prakash: Wow.
(41:28) Parag: 60. Because the team was too good. And the, the, the batting second, the opposition was 15 for no loss in, after three overs. And then I came in to bowl. And they were all out for 32.
(41:42) Prakash: Wow.
(41:42) Parag: So that was the, that’s why I said, you don’t know. I mean, until, you don’t celebrate or don’t feel bad until the last thing is done, right? You never know when it is there.
(41:51) Prakash: And what were your figures?
(41:53) Parag: I think I took some seven wickets in four overs or something. That day was, you know, like a... some days just happen, right? You just get into a flow. So those two memories are very strong. So, I always remember that. You can fail from winning positions, and you can win from losing positions. So that is something that cricket has taught me, if not anything else.
(42:13) Prakash: Brilliant.
(42:16) Prakash: So last question. What is the most underrated technology in chips or deep tech according to you?
(42:21) Parag: Well, actually there are many. But the three most underrated that I tell you that I feel they are underrated. One is the LMS algorithm that runs practically, most people wouldn’t know it. Most people who work in AI also don’t know it. That’s why the magic of the LLMs come in or the CNNs come in. It’s an algorithm designed over a weekend by, I think at Stanford by Widrow or one of the guys, Hoff or Widrow. Those two guys built this algorithm and that is the backbone of the LLM revolution that you see today.
(42:57) Prakash: And what is the algorigthm?
(42:58) Parag: It’s called the least mean square. So it’s an optimization algorithm that you find a local optimum or a minimum by just iteratively descending without spending a lot of compute power. Earlier it’s an approximation of the least squares technology where you know, you need to do matrix inversion, so that is very, very computationally expensive.
(43:23) Prakash: Right.
(43:23) Parag: It’s one. The other one, I like talking about abstractions, right? The, that we did, probably we should talk about that as well is, in the EDA, there’s an algorithm called simulated annealing which forms the backdrop for all chip layout. You couldn’t build these two-nanometer billion transistor chipsets or 10 billion transistor chipsets without that algorithm. I think it was invented in the ‘70s at IBM. And the third one from a circuit topology perspective is bandgap reference. I don’t know if you know that. Bandgap is, most digital engineers don’t know about it. It’s I think it’s poetry in circuits. Right? It’s a way of getting a stable voltage reference in an analog circuit irrespective of what corners of PVT that you have. It doesn’t vary over temperature, process, or voltage. So those three are my favorite, understated, most people don’t even know about it.
(44:18) Prakash: From the way you speak about topics, I’m sure you are a big reader. Any recommendations on books or things people should read?
(44:29) Parag: I read a lot. My two of my favorite ones are, I think one of the books that I changed my perspective is Fooled by Randomness. I think it’s a book by Nicholas Taleb.
(44:42) Prakash: Taleb.
(44:42) Parag: Taleb. And if I had that book in growing up in college, probably I would have become an economist, so I hated economics so at that time. The way he brings about it. That and one of the other books that I’ve actually from, you know, again, from an AI perspective, I recommend most people to read is The Emperor’s New Mind by Penrose. He debunks this thing that intelligence comes through LLMs and neural networks.
(45:13) Prakash: Emperor’s New Mind.
(45:14) Parag: I’ve not read that.
(45:14) Parag: The Emperor’s New Mind, it’s a big, fat book. It’s a difficult book. He’s the only guy who explains Turing machines and Gödel’s hypothesis, which every computer science guy should know. I think all these days colleges talk about, you know, we have 10 years’ experience in AI and all of that, right? They don’t teach them Turing machines properly and Gödel’s theorem properly. If they, those two things somebody knows, we’ll just hire him. If somebody knows about, in this generation, you even knows about Gödel properly, we’ll hire him because, you know, he’s done a lot of reading, right? Most people don’t know Kurt Gödel. Then from a literature perspective, there are a lot, lots and lots. A lot of stuff in Indian literature, but the one that stands out was which is there also in my email signature constantly, not often, but I use it often, is The Little Prince. It’s a book written by Antoine de Saint-Exupery... French author, I don’t know, I don’t get this French names right. It’s supposed to be for children, it’s a book for kids, for children. It is not at all for children. It is layered and layered and layered. Each time you read it, you get a very different perspective, right?
(46:26) Prakash: Beautiful.
(46:26) Parag: Yeah.
(46:28) Prakash: All three are such diverse topics.
(46:31) Parag: Yeah, fantastic. Thank you.
(46:34) Prakash: So to get back to the conversation we were having, to quote you in some of the past conversations you’ve said, ecosystem trumps technology.
(46:43) Parag: Correct.
(46:44) Prakash: So from an ecosystem context, India ecosystem context, where do you believe are the major opportunities? What are the biggest hurdles that entrepreneurs face? And what’s been your advice to people who are starting off in this chip or deep tech space?
(46:59) Parag: the hurdles have been, I think, I mean, see, there’s far more hurdles than there are tailwinds in India, right? At least things are changing a little bit right now. See, we, we lack patient capital. We never had any patient capital. We have, unfortunately, you don’t have these one-look investors.
(47:24) Prakash: What do you mean by that?
(47:26) Parag: This one-look investor is, I’ve been fortunate to have met two or three of these guys. Unfortunately, mostly in the US. And maybe in India we don’t get to access them because they’re too big and the gatekeepers don’t allow it. There’s one of our investors from Sinclair, David Smith. He probably is a billionaire himself. Potentially a billionaire and a media mogul in the US. And we had, when we were in doldrums and we were trying to raise our money when during our second near-death experience, I go talk to him. He’s never met a guy with my accent, right? He doesn’t understand my accent. He just looks me up in 15 minutes and says, “I’m going to work with this guy.” So, they have this gut feel that gets evolved over a period of time. People who are operational, right, who have built companies, who have seen people, who have seen life, they will see that. They will see through, cut through all the noise and then then see through it.
(48:26) Prakash: “Can I bet on you?”
(48:27) Parag: “Can I bet on you?” right? Can I bet on you? So, that’s what you do, right? As VCs fundamentally, I believe, this is maybe they have a different process, but I believe they take an already irrational decision to work with some guy or not. And then the paperwork comes in to prove that, you know, okay, I want to work with this guy, right? So, at least if you have the humility to acknowledge that, things will be different. In India, unfortunately, when most of the VCs don’t have operational experience, they’re just kids who come out of IITs or fancy MBA schools and then they’ll come and they’re very good at analysis, they’re analytical morons. They’ll keep slicing and dicing and all of that, right? That doesn’t help. You have to be able to connect with the guy. Maybe there are some guys in India as well, we have not, at least I have not met them during our initial journey and I stopped going to them after 2010. They said there’s no point in talking to them.
(49:18) Prakash: Fair point. So when you look at that, that kind of environment, right? You’ve been an advisor to several of the startups or people who are starting off in their journey, what do you believe are the things that they must absolutely get right?
(49:35) Parag: I don’t think, Prakash, there’s such thing as absolutely right. I think a startup is like a movie. You’re as good as your last one.
(49:41) Prakash: You have a hit, doesn’t...
(49:43) Parag: Yeah, it’s like a game of cricket or any other basketball game. Just because you won one game, doesn’t mean you can win the other. Each story is unique, right? Each story is unique. And to me, fundamentally, I think it’s not about the idea. The idea will come along. If the team is there together... most of the times, you know, team, the startups fail because the team splinters, right? The founders don’t get along. So if you have people who work together and if you have an idea and you’re passionate about it, you’ll figure out a way. You just have to see, of course, it has to make a little bit of business sense also, right? You can’t be doing hara-kiri. You can’t just do, commit suicide. But beyond that, if they are willing to change the direction, I think that’s what you should look at. You should just aim at a certain direction. It’s just like the LMS algorithm, right? You don’t know, you go approximately around and just figure your way around as you go along. And be malleable to any changes that come along. Those teams probably succeed far more than people who are rigid and who are, you know, over, oversold on an idea.
(50:43) Prakash: Understand. And as they do that, one of the aspects you talked about in our session as well as in the past sessions is need for collaboration rather than competition.
(50:52) Parag: Absolutely.
(50:53) Prakash: So what could our policy makers, academic institutions, startup founders, or even large corporates combine, collaboratively do to really further the cause of semiconductor and deep tech ecosystem in India?
(51:07) Parag: Oh, a lot. Everybody is working in silos. Let me start off with the corporate honchos, right? They are too buried in their excel sheets right now, right? They are all about operational efficiency. Must, that’s one leg of the stool. Then the entrepreneurs are somebody who can make things work. You got the academicians who can actually think, they should be thinking 15 years beyond. Right? 15, 20 years beyond what, what’s the next thing coming in? And the policy makers, have a very important role. I think the policy makers is probably the most important, it’s the role of a catalyst. You know, you have to come up with policies which spawn entrepreneurship, which help you with removing hurdles, unnecessary hurdles. We are extremely bureaucratically tangled country in some sense, right? Simple things like, you know, people at the end of it. Show me incentives and I’ll show you the outcome is somebody who said that.
(52:08) Prakash: Charlie Munger, I think.
(52:09) Parag: Munger, okay. That’s the thing, right? The right incentives have to be created. If you want an outcome, don’t chase the outcome, chase the incentives. Change the incentives and the outcome will change. Right? Like, for example, there’s this constant refrain that corporates don’t do R&D in India, right? Okay, then one of the things that they have scared of is write-offs. I have been saying for quite some time, let’s come up with a write-off policy which is very different from the rest of the world. And they say, “Oh, it’s never been implemented.” That’s the problem. They have the mindset of a lawyer, not an innovator. They want precedents for everything. That change is happening gradually, very slowly, but it will happen over a period of time. Hopefully. And when all these legs come together, and you rightly identified all the four legs of the stool, I think we will be unstoppable.
(52:58) Prakash: And are there any early signs or policies or initiatives you feel are stepping in the right direction?
(53:05) Parag: Baby steps. There’s more optics, but I think we are already taking baby steps towards the PLI, the DLI schemes at least for, for semiconductors, right? And there is generally awareness about semiconductors. That is a big thing, right? A very big thing. So, we raised those days at that dollar value in 2011, I think we raised about 10 million dollars or something like that, right? And nobody even knew about it. And today the minister tweets if somebody raises money, which is very good. And the other day at IMC, they hand-picked four or five startups and pitched them in the stage in front of the PM. That’s big, right? So at least they get visibility. That helps. There is intent. At least there is intent now. They will stutter around and we’ll figure out a way to, the only advice to them is they should listen to the guys who have been on the ground, not get some foreign transplants who don’t understand the realities of building a company in India.
(54:05) Prakash: So people like you can definitely contribute.
(54:06) Parag: Exactly. We are actually, we just give our inputs, you know, on a regular basis on what should be done.
(54:15) Prakash: Very cool. Yeah. I’m sure it’ll be extremely valuable for the policy makers. So, switching gears to your personal philosophy. A lot of it audience would have already heard so far. You’ve talked about multi-dimensional nature of success. You have to be brave and foolish simultaneously to succeed as an example, right? So how much of that has shaped your journey? What do you believe true success or true failure is as you have seen through several downturns and upturns in your startup life?
(54:48) Parag: I think for me, see as Saankhya, there’s a commercial aspect and there’s an ecosystem aspect. Commercially, I would say we were like, okay, so-so success, right? We didn’t become a billion-dollar company and sell it off. But I had gone to IIT Bombay and then in one of those sessions, the professors there said, “You know, we look up to you guys to do.” And I said that, that’s good, right? That’s success, right? For me, the best recognition you can get is peer recognition. If your competitor or your peer recognizes you, you’re done. And he puts you on his radar, that’s the best, and especially if the competitor is a bigger one, a well-known one. And he considers you as a worthy enough player, that’s a big indicator of success. I think I’ve also been, as you get into this startup, right, and you start to build companies, I think it’s a bit of, bit more of a spiritual journey more than anything else. People don’t realize that.
(55:46) Prakash: Why?
(55:47) Parag: You know, you discover yourself, right? Spirituality is, I mean, people think spirituality is about sitting there and you know, meditating. That’s part of it, right? That’s the mechanics of it. But the fact that to be spiritual, you fundamentally have to be very brave. You have to have the courage to accept the way things are, right? And things within your control. And things not in your control. And then, one of the reasons, you know, once you take diksha in the Indian monk system is you change your name is because you want to cut your past out, right? So here you discover that, that’s because you don’t want to be attached to that past. You discover facets of your personality that you never thought were there. At least for me, you know, there are a lot of aspects that I have discovered of myself and of people around me that you never thought we had, right? And that’s where the sense of leadership comes in, right? When, you know, how do you behave when you’re in trouble, right? Do you just jump and run away and throw everybody under the bus and just go off? Or also, equally important is how do you behave when you have power? For me fundamentally is...
(56:56) Prakash: It’s a mirror to your character.
(56:57) Parag: The best way to test a man’s character or a woman’s character is to give them power. Your best and your worst both get amplified.
(57:07) Prakash: It’s the position. It’s not the person.
(57:08) Parag: It’s not the person. So in that sense, you could be successful, you know, at anything. If you are at peace with yourself, you can be successful at doing anything. In fact, I remember Ralph Waldo Emerson has written an essay on success, where he says what it means to be successful. I urge your viewers to go and watch that. It’s a small essay.
(57:30) Prakash: Yes. I think I’ve read that.
(57:31) Parag: You have read that, right? You planting a tree, planting a plant, flower, that itself is success. Raising a good child is a success. I mean, we unfortunately reduce it to one number, right? Oh, he’s a billionaire. I mean, and the media tends to...
(57:47) Prakash: Those kind of...
(57:48) Parag: Those kind of things, right? There are people who are successful without...
(57:53) Prakash: any of that.
(57:54) Parag: Yeah.
(57:56) Prakash: So how much in that journey has mentorship helped you and how have you been able to balance ambition and humility, right? You come across as such a down-to-earth person for everything that you have achieved.
(58:07) Parag: I don’t think I’m down to... I have most people think I’m very arrogant, but anyway, that’s a different. I’m not to think I am humble enough. Yeah, I’m outspoken. Let me put it that way, right?
(58:18) Prakash: That’s slightly different.
(58:19) Parag: A bit outspoken. I would say, yeah. Mentorship, you know, we haven’t, I have not had mentors directly. In fact, we have had more good or bad, I don’t know. We never had one mentor that we looked up to. We had a motley peer relationships. A lot of peer relationships. One of the things in Saankhya was, we are all equal, but there is a first among equals for some external facing thing. But by and large, it’s the peer mentorship that helped, right? But then there are some, at some points in time, some people have, you know, told us things that we probably held the mirror back to us on when we were probably going wrong. One of the things was, I think we had an advisory board that we had set up. And one of our advisors told us that you guys are not media savvy. You’re not going to the media often enough. And we said, I cringe at going to, you know. Six years ago, seven years ago, none of us would have even come into this podcast, right? But then we realized that, you know, these stories need to be told and at the end of the day narratives are important more than numbers.
(59:21) Prakash: Yeah. Yeah.
(59:22) Parag: Narratives are very, very... people like to listen to stories, right?
(59:26) Prakash: And our story is as good as anybody else’s, right? And it’s been interesting, so.
(59:30) Prakash: It’s very interesting. And yeah, human beings relate to stories much more than data.
(59:34) Parag: Much more than data, yeah. So even being able to tell a story itself is success, right? And now I have a lot of regard for the guys who write scripts, right, in the movies. That’s really creative, right? In fact, in Saankhya, very early on, we had this idea of actually putting in a camera there. But then that would have violated privacy concerns, right? But the kind of, we are all colorful people, all of us, right? And we use very colorful language at times. So, which is now passing off as, you know, very...we would have had a very interesting web series called “Startup” or something that would have come out of that. Maybe one day we will do that.
(1:00:11) Prakash: Adam Grant recently, I was reading his post, he said colorful language is a mark of authenticity.
(1:00:17) Parag: Yeah, yeah. It’s a bit of a catharsis, right? You use all this and, and this is true, especially in our region, right? In the Belgaum, the South Maharashtra, North Karnataka belt, right? People tend to be very rough when especially when you’re with friends. They use very colorful language very often. The amount of color you use dictates how close you are with the person.
(1:00:42) Prakash: When you meet college friends...
(1:00:42) Parag: Oh yeah, not just any... it’s like that, right?
(1:00:48) Prakash: All right. So switching gears. And you briefly talked about this on computer science. And you mentioned computer science is increasing the level of abstraction. So, every five, six years, the productivity for the developer doubles and Moore’s law has doubled the computing in 12, 18 months. Obviously, it is happening faster with GPUs now, one would argue. So, what do you believe are the most interesting opportunities with keeping that premise in the future that India could really take advantage of?
(1:01:21) Parag: Right. So, I think not computer science or maybe computing paradigm, computational paradigm, rests on two fundamental principles. It was very complex, but you can distil it to two. One is increasing the level of abstraction, and the second one is called late binding. You know, you bind something as late as possible, which is like, again a cricketing metaphor, you’re playing on an English wicket, damp English wicket, you don’t cut across and go across the line, right? You wait and watch the ball till the last. Binding is something like that. So, binding is you are committing certain decisions very early on. You should try and commit the decisions as late as possible. Because then you get more flexibility. It’s like you’re getting more choices. So, hardware architectures is the least form of binding in the sense that I’m committing or baking an algorithm into the chip. I can’t change it once it’s taped out, right? A programmable thing is one step better than that. Right? Where I’m able to change it very late. One step further is the concept of hypervisors. The whole cloud paradigm rests on the concept of late binding. You have a hypervisor. You don’t bind an operating system to a machine. You have a hypervisor in between that you can run multiple operating systems. Then you have containers that can actually run. How does it help? You can use compute resources far more efficiently. That’s why large farms of servers in the whole thing in the data center is all about how do I reduce power, how do I reduce the amount of equipment, how do I reduce the amount of resources I use to build out a particular workload. A workload could be a GPU workload or an AI workload or, you know, whatever. So those two principles are really principles fundamental from a semiconductor perspective. So, what does that translate to? It translates to building better custom programmable architectures. Like for example, in Saankhya, we set out to build programmable custom architectures that bind late for modems, which is a very difficult problem to solve. You could look at other workloads to do that. You could build frameworks, software frameworks, which allow you to bind late, which means today, one of the reasons why it was difficult to displace Intel and now difficult to displace Nvidia is because of the amount of software that’s being already built on it, right?
(1:03:48) Prakash: CUDA being an example.
(1:03:49) Parag: CUDA being an example. I mean, it’s more a software company than a hardware company, right? CUDA is the moat, real moat that comes in.
(1:03:54) Prakash: Agree.
(1:03:54) Parag: Yeah. So, do you know incidentally, it was never built for, the GPUs were never built for AI.
(1:04:03) Prakash: That is true.
(1:04:04) Parag: One of those OpenAI guys, accidentally said, “Okay,” he didn’t know how to program RTL, right, in an FPGA. He said, “Oh, let me try this stuff.” And 2011 or 2012, he just tried it and it worked. And that’s how, so that’s why I said, all these things happen accidentally. Some of these, if you’re long enough, you get accidentally. So, these two paradigms are key. Then of course, that’s the digital architecture, right? I’m talking about the digital architecture. In the analog world too, and in the RF world as well, there are a slew of architectures around this concept. There are in RF, there’s this concept called direct sampling receivers, which is basically you just take in the RF signal and then try to do everything digitally. Very complex to do. Those are the things that are, that are big opportunities. But by and large, semiconductors, if you can get something at a lower price than your existing competitor and a slightly better performance, game on. It’s all about execution at the end of it. These are technologies but you have to be able to execute, right? Even if you have a good piece of an idea or whatever, to get to, you know, to execution, to build a business out of it is itself a big challenge. Don’t discount that part. Sometimes we just see the tip of the iceberg in terms of, you know, the idea.
(1:05:26) Prakash: True.
(1:05:26) Parag: What goes beneath is...
(1:05:27) Prakash: So much more.
(1:05:28) Parag: What differentiates people is execution.
(1:05:31) Prakash: Yeah. So with those two premise elements that you talked about, abstraction of computing and as well as taking the choices to the last, how, does it present some unique opportunities for India? Or is it the same for any market?
(1:05:53) Parag: It’s the same for any market. See, what distinguishes us, I think what opportunities that we have is today if you look at it, there’s a high-end Nvidia and there’s a data center market where the US really is up there, right? But the majority of the things that work, your phones, your feature phones, your routers, whatever else is all Taiwan and China.
(1:06:23) Prakash: China. Yeah, including robotics, most of everything, right?
(1:06:25) Parag: So if you view it from a finance perspective, they are able to sell these chips at $2, $2.5, one of the challenges we had in Saankhya was that, right? We had design wins, but we couldn’t meet the price because the supply chain thing that we had not cracked, right? I remember this with Genesis Microchip. Genesis Microchip at one point in time had 85% of the market share for LCD TVs around the world. Then there comes along a company that then becomes MediaTek later on, that displaces them on just out-executing Genesis and getting the prices down faster than Genesis could. The reason is, for American and Western European countries, there’s a minimum margin that they need to be able to sustain a business. Right? So the minimum ASP they would need to have to earn a business. Our barriers are very low. The only other company that can take on Taiwan or China is India. So that is a huge opportunity for us to clean up. And that’s a technique I think China has used even in sports. I said earlier, right? They in the late ‘80s and ‘90s, they were just like India, few, one or two brilliant individuals who succeed inside of the system.
(1:07:44) Prakash: This was the conversation we were having before we started recording.
(1:07:46) Parag: Precisely. So, they went about looking at the lower rung of the sports. Don’t go and pick up the 100 meters dash first, right? So there are a lot of other things that you can pick up, increase your tally. Once you increase the tally and then people start to get confidence, then you can go at the 100-meter dash. Agree. So that’s how China has come up, right? It’s not...
(1:08:05) Prakash: Little by little.
(1:08:05) Parag: Little by little, little by little over a period of time. And you give yourselves about 15, 20 years. Yeah. You will get one inflection point. A geopolitical inflection point is guaranteed. Yeah. In a 15, 20 years. But the question is, can you last that long?
(1:08:19) Prakash: Right?
(1:08:20) Parag: Yeah. That’s the challenge. So everybody wants to become a billionaire in three years, right? So that’s the problem. Not everybody can. That doesn’t mean you are not successful.
(1:08:31) Prakash: That’s true. Your definition of success needs to change.
(1:08:33) Parag: Needs to change. Yeah.
(1:08:35) Prakash: So that brings me to the last question I ask all my guests. India’s venture into deep tech and semiconductor is not only about domestic growth. It’s about our position in the global technology landscape. So, if you fast forward 15, 20 years, you talked about it being a long game. What is your vision for India’s position in that map and what needs to happen today to make that a reality?
(1:08:58) Parag: Yeah, there are four aspects to it. See, one is the OEMs, we have very few OEMs in India firstly, right? Building electronics products to pull out. Then there’s the fabless companies that supply to these OEMs. Then there’s the manufacturing ecosystem. Manufacturing ecosystem is very nascent in India, right? So at least in the last couple of years, there have been steps towards at least creating that expertise. That will, to me, it will take much longer. The design and the OEMs are something that can, that can actually, in the next five or 10 years, you can get a very big one coming out of India potentially. Can come out of India. That’s where our strength is. And that’s where most of the value is.
(1:09:40) Prakash: Right.
(1:09:40) Parag: Design has got the most amount of value. Design is the maximum value. But manufacturing is important for strategic reasons. So, at the manufacturing thing, even if we get two, three, 5%, 8% of the world’s supply chain, today we are non-existent in the global supply chain. At least we get to 5% or 8%, it’s victory for us, big one. Design, we get up to 10, 15%. I think design and OEM, that’s good. 10, 15, 20%. See, you can’t indigenize everything. You can’t be Atmanirbhar for everything, right? But you have to be part of the global supply chain. And unless you have certain critical components with yourself, we have dreams of being a superpower, you can’t do that. You have to control certain parts of the critical parts of the supply chain. And if you do that, that’s good enough. But we won’t be able to indigenize everything. And on the machine tooling part, which is the lithography and, you know, the..
(1:10:39) Prakash: That’s the fourth element.
(1:10:40) Parag: Fifth element rather, there’s nothing yet in India. There are not, there are not even lithography, you know, courses in India, I think, as far as I know.
(1:10:49) Prakash: So what needs to happen today to make these successes a reality or these areas for us to...
(1:10:54) Parag: See, first is there are a lot of these applied physics labs everywhere. There are applied physics labs and applied math labs. They need leadership to be able to go build these products. IISc has an applied physics lab. I’m sure a lot of IITs have that. You have an Indian Statistical Institute. You think there are the smartest people on earth. One of the smartest, okay, not the smartest, but one of the smartest. So that environment needs to be there, right? The environment that it’s okay to take a long-term bet. It’s okay to play around. And then the leadership that, see, this is one of the challenges that is there in typical corporate leadership, right? They cannot handle mavericks. So the people who are innovative are a bit of a maverick. They have to handle them with care. They have a very different way of looking at life. And that’s why they bring value to the table. They will not fit in your regular pigeon-holed...
(1:11:45) Prakash: Because you won’t fall in line.
(1:11:46) Parag: You won’t fall in line. So the way to handle them is what is the challenge that we have in India, I think. We are not able to nurture that kind of thought process. And then, once you beat them down and then they say, and then that’s the incentive we were talking about, right? They have no incentive to go and innovate. They would rather sit and listen to the boss and do what he says. So that part is something that we can nurture. And then therefore, these things in lithography, even if we supply engineers, that’s I think is big. I think there are a lot of guys who work for ASML from India. There are a few at least I know personally. So that happens, then the expertise starts to build up.
(1:12:26) Prakash: Starts to build. Fantastic. So, we come through your entire journey and heard several of your perspectives. I’m sure the audience will take a lot from it. Is there anything that you wanted to cover that we didn’t cover?
(1:12:42) Parag: I think we have practically covered everything. And I think like, the last part I would just want to say is, somebody had asked me, is this the right time to start? I think any time is right. Just do it, right? And you do it because the last part, I would like to say is, about this character called Dev Anand. You know film stars we generally associate with not very high intellect, right? So I had watched one of his interviews, the last interview, I think in 2002 or 3, I just saw, my wife was watching it. And this guy comes, Simi Garewal, he was in that Simi Garewal show, I think. So she asks him, “Dev saab, you have been making movies for so many years. Your last hit was in 1976.” And you still making movies. He smiled, he was I think 75 or something. He says, “I make movies for myself, not for you. You want to watch it, fine.” You don’t know how to watch it, that’s fine too. And the second thing he said, something in the same interview, then I have a huge respect for that guy after that. He says, “Living is primary, livelihood is secondary.” The problem is we are chasing livelihoods there, especially the middle class in India, right? We are sitting on our fat ivory towers and, you know, letting life slip by. So livelihood is secondary. Living is primary. So that’s the Dev Anand line I would take. And that’s also the reason why I like this, this book that you put here, right? S.D. Burman.
(1:14:17) Prakash: Yes.
(1:14:18) Parag: He is my favorite. And because Dev Anand recognized, most of his Dev Anand’s movies, S.D. Burman, Dada Burman is, you know, given the music. So and we can see the...
(1:14:29) Prakash: Yeah, for the audience, there is a book, S.D. Burman book that Parag happened to see when we started the recording.
(1:14:36) Parag: Yeah, and that’s one of my favorite books as well. So I keep reading it.
(1:14:41) Prakash: Fantastic.
(1:14:42) Parag: His biography.
(1:14:43) Prakash: Yeah.
(1:14:44) Parag: And because in that, I think I, in that book, there is, Shiv-Hari, you know, Shiv-Hari, Hariprasad Chaurasia and...
(1:14:54) Prakash: Hariprasad...
(1:14:55) Parag: Shivkumar Sharma, right? Pandit Shivkumar Sharma. So he says about Dada Burman, right? Because they were understudies with him. So you can imagine his level. So he always used them as his musicians, right? Either flute or tabla or, you know, or the santoor. He says, while the Indian classical, shastriya sangeet guys look down upon Bollywood music, imagine you’re given a scenario, you’re given a scene, and you have to create a song, you have so many constraints and you have to come up, and that’s creativity at its best. So you have to come up with a situation, given a situation, given the director’s thing, you have to come up with a song that actually becomes a hit. It’s really, I mean, hats off to those guys.
(1:15:43) Prakash: True.
(1:15:44) Parag: That’s true creativity.
(1:15:45) Prakash: Yeah, 100% agree. What a fantastic conversation. Thank you very much.
(1:15:50) Parag: Pleasure, pleasure being with you.
(1:15:52) Prakash: Yeah, nice talking to you as well. And wish you all the very best in your future journey of empowering India on the semiconductor and deep tech journey. So, for the audience, thank you for listening, thank you for watching. Please follow our show, give us feedback on what else you would like to listen, what kind of people, what kind of innovators, what kind of conversations you would like to have in the future. Thank you very much.
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