Finance

BIO

Suranga Chandratillake, founder of Blinkx, is a technology innovator with over seven years of frontline experience. He received his master’s in computer science from the University of Cambridge, England, specializing in distributed processing architectures. After university, Suranga worked as a software developer for Morgan Stanley, creating global risk resolution systems, and next-generation voice recognition technologies at netdecisions, an IT consultancy group. During his time at netdecisions, Suranga also joined a small Cambridge-based technology start-up called Anondesign, working in the area of commerce-focused content management and delivery. In true entrepreneurial fashion, he held numerous roles including pre-sales, product development, and software development. Another Cambridge-based technology firm - Autonomy Corporation - caught Suranga’s attention and he joined the company where he became the U.S. CTO. After three successful years at Autonomy, Suranga founded Blinkx.

Interview

Forum Link: Tell us about your company.

Suranga Chandratillake: Blinkx is a video search company; that’s what our roots are, that’s what we’re good at. We have very unique technology that literally watches and listens to video content, on the web in this case. The fact that it can watch and listen to that content is the reason it can create a very detailed record of what each individual video on the web is actually about. We have used that to build a very large index of videos from all over the world which you can search through at Blinkx.com. You can go to Blinkx.com and type in whatever it is you’re looking for and you can find videos from around the web that match your topic. So that’s really what the core of our company is.

From a business point of view, we’ve run Blinkx.com as the destination site itself, but we also license the index to other companies. So if you were to use Ask.com or the Real Media player or Lycos.com for example, all of these sites have video search tabs and they’re all powered by Blinkx, and we charge those companies for that service and that’s how we’ve built a pretty healthy business. In fact we built it so healthy that we were able to float the company early this year so it’s a public invested company now. We have gone public on the London stock exchange, in the UK where I’m originally from, in May of last year. Our company’s market cap is about $250 million right now. So, it’s been a pretty exciting run.

Forum Link: What do you see as a next step for your business.

Suranga Chandratillake: We’re very interested in taking that same approach of processing and understanding video and saying, “What else can you do from that information you’ve garnered from that video?” One of the obvious things you can do beyond search is advertising. So it is possible, given that you know what a video is about, to find ads that really match that video very well. That’s the secondary market, that Blinkx has been focused on very heavily over the last 3-4 months. Blinkx ad-hoc, launched last month, is a very good example of this. What Blinkx ad-hoc does is, if you’re the kind of person who embeds videos on your website, on your blog or personal page, you can go to Blinkx ad-hoc and link to that video, and when you do, we process that video, understand what it’s about, create a record of information about it, and provide you with a full piece of code called an “embed code” which you can then place next to your video on your website. Once you do that, every time someone comes along and watches that particular video, that little piece of embed code calls the Blinkx system and says “someone is currently watching this particular video.” The Blinkx system finds text ads that are related to that content and sends the answers back to your page where they can be displayed either beside your video, or actually on top of it. So, while someone is watching the content, they’re being shown textual advertisements that are contextually related to what that video is all about. If you’re watching a video about San Francisco, it’s going to show you ads about hotels in the city or cheap flights to the city, etc. If you’re watching a piece about hybrid motorcars, it might show you links to your local Toyota Prius dealer. It’s about contextually tying ads to the video content someone is watching. If anybody clicks on those ads, then the advertisers pay for that and that revenue is split between Blinkx and the person whose website the ad is on.

Forum Link: Who is your target user for this service?

Suranga Chandratillake: Anyone can use it so it is open in that sense, but I think the people who will get the most out of it are the so called pro bloggers. These are people who have a reasonably popular website, perhaps use video on that website, have interesting things to show as well as write about. Those people have a big enough audience to get a decent number of video views and therefore a decent number of click-throughs. Those are the people I think this will really work well for.

Forum Link: Has video really arrived on the internet or are we still waiting for the technology to catch up?

Suranga Chandratillake: In general, video is still new on the web and there are many problems with that. One big issue that we consistently still deal with is that not everyone has the technology to watch all of the videos. People don’t have the right players, people have a connection that isn’t very fast, or they’re dropped sometimes. There are many issues like that but there is definitely a core of users who are watching a lot of videos and there is definitely a core of websites that are now offering a pretty reliable service. If you click on any of the bigger websites like CNN, or the BBC, HBO, ABC or Youtube, you will get a pretty consistent, pretty reliable service. The experience is getting better all of the time, but no doubt it’s definitely not as pervasive or as reliable today as text on the web. It is certainly big enough and the audience is big enough that it’s possible for a company like us to exist and make money from that.

Forum Link: What is the big picture for Blinkx? How big can you get?

Suranga Chandratillake: My aim and my vision for the company is in some ways incredibly simple, yet very powerful. Fundamentally, we want to be the remote control for video on the internet. Over the next 5-10 years, we’re going to see much more content online and we’re going to see not just short clips that don’t play back very well. We are going to see many more full length TV shows. What today we think of as television is going to increasingly happen on the internet. When that happens, you will need to have a control to find the right things that you want to watch at any given point in time. Today it’s already quite hard on your regular TV, if you have a pretty full cable or satellite package. You may have 200-300 channels to go through and already the remote control and the TV guide channel are starting to fall behind the reality of that problem. That will be 1000 times, a million times worse on the web. You can watch anything, anywhere, at any time, and you need therefore a very powerful technology to help you know where the content is and even suggest things. You will need a system, which actually knows your interests and preferences and, before you even think of it, suggest those things.

Forum Link: Sort of like Amazon knows your interests with books?

Suranga Chandratillake: A lot of things have to be done to make that world work. The way I describe it is the remote control for the internet TV. Just as you need a remote today to sort of cycle through the various options you have on your television, you are going to need some sort of remote on the web as well, and that’s really what we’re building. Today it’s about the search box, but tomorrow it will be about other devices, different forms and methods of suggesting content to you. If you look at the way media has worked, while text will always be a popular format, TV is very big. It attracts a lot of the advertising budget worldwide. It is used for many hours each week by very varied and diverse audiences. It is a very significant medium and that medium is going to start happening increasingly on the internet and therefore it’s a massive market.

Forum Link: I can go to Youtube and look for video content that would be of interest to me, so how does Blinkx differ from that?

Suranga Chandratillake: What it doesn’t let you do is search beyond Youtube itself. Say for example you’re looking for something that isn’t on Youtube. You’re lost. You’re stuck. What Blinkx wants to do, is be an objective place for all of that content, so if you do a search on Blinkx you may find Youtube links but you may also find a link to ABC.com to watch a TV show that you can’t find on Youtube. In that sense, we’re broader than Youtube, but in many ways we offer something quite similar, if Youtube had what you were actually looking for. There are definitely companies like that who are in that mindset, in the sense that people looking for content on the internet think of those sites and they go to there. Part of our challenge is to change that behavior and say, “Hey if you continue to do this, then you might miss a bunch of stuff that is out there, but we can help you access that stuff.” That’s really where I think the biggest challenge is for us, but the market is growing, and the number of people using this kind of service is growing, and that is where we have the opportunity to push our brand and open our brand up to the audience.

Forum Link: Are you interested as a company in pursuing search engine business beyond video?

Suranga Chandratillake: At this stage our focus is on video, and the reason for that is that text search engines that search web pages are a very established business with very large players who have huge brands, very powerful, very popular brands. It would take a very big jump in capability to be able to in any way threaten or challenge those brands. You would have to have something that is, in my opinion, twice as good as Google to have any impact on Google. Having something that is 50 percent better is impressive technically, and I would certainly respect someone who did that from an intellectual standpoint, but I doubt that would be enough to actually turn people away from Google. That’s a big problem. In that sense I think we believe that it’s worth focusing our efforts on newer markets where really the brand isn’t already there, where there isn’t an obvious solution. Video is a great example of that. It’s also very hard to do well. Posting video is a very tricky problem. It requires a lot of smart technology and it requires a lot of effort. Video ends up being a very nice sweet spot as a focus. Of course we could extend it in the future, we could do other things, but right now I think that’s our focus.

Forum Link: What is Blinkx’s revenue model? How do you monetize your service?

Suranga Chandratillake: Really what we are is the search technology provider to this whole online video world. If you are a media company which has a lot of videos on your site, and you want to be able to search those videos, sort them and organize them, we’re the people that can provide you the technology to do that. If you are an internet search portal and you want to have web-wide video search to make sure your users can find whatever they want to find, then again we can provide that. We provide a plethora of technology solutions to help people who have video on their websites make better sense of it and therefore operate more usefully to their users. In doing that, what happens is more users watch those videos, and when they watch those videos they typically are exposed to advertising which obviously generates revenue. How we get paid is by getting a share of that revenue. In that sense our business is tied to the overall online video advertising market. As it does well, we do well. Right now that market is very healthy and it’s growing very fast.

Forum Link: How did you fund the company? Was it difficult to convince investors to get involved with a startup in this highly volatile industry?

Suranga Chandratillake: We started off self-funded, so that the original founding team of 2-3 people had enough reserves to basically work without too much of a salary for a few months. We did enough that we could basically build a working prototype of the end-to-end system that we wanted to show to the market. We used that to begin to launch the product but also to go out and get some initial feed funding, and we actually did that with business angels. We talked to people we knew and people we’d heard of who we thought would be interested and basically gathered together a band of angels who aided in funding the company over that period. That worked very well for us because venture capital is a notoriously fashion driven business. In any given year there is a particular kind of company that VCs are interested in, and if you’re not the right kind of company at the right time then it can be really quite frustrating to try and raise money.

We felt that when we started the company in March 2004 that VCs were not very interested in consumer technology companies. They were much more focused on biotech and enterprise software. We knew that even though we probably could get funding, it would be a pretty painful process, so we went the angel route instead and that worked very well for us. We actually raised two and a half angel rounds over the period of the company’s history. In total we raised about $10 million that way, and that was basically for us to build the company to the stage where it was generating reasonable revenues. At that point we looked at a bigger financing realm; we wanted to raise something like $40-60 million and we wanted to know how we could do that. One of the options was to do a big venture capital round. One of the options was to take some debt, and the third option was to actually lift the company publicly. Initially we thought we’d do the VC option, because it was what people tend to do, but actually it turned out that it was a pretty large round for venture capitalists, and although there were a few offers, we weren’t comfortable with the level of control that we’d give up in the company if we did that. In the end, what we actually did was we took it public, and we had enough revenue and we had a solid enough business model to be able to talk about that to the public market. We raised $50 million by an IPO.

Forum Link: What was your revenue at the time when you went public?

Suranga Chandratillake: The year up to that day, our revenues were just under $3 million.

Forum Link: So it’s a fairly small company still for going public, and you went public in the UK?

Suranga Chandratillake: Yes, that’s right.

Forum Link: What attracted you to be involved with a small technology company?
Are you driven by a financial opportunity or is it something else?

Suranga Chandratillake: I’ve worked for small and large companies and I enjoyed many of those experiences. Starting your own business is a very different experience. You feel a lot more exposed because you have to go and make it happen yourself, there’s no one to follow. On the other hand what’s amazing is the feeling of fulfillment that you get, whether you succeed at something, whether you launch a product or get a customer. You really get all of that yourself and that can feel incredibly empowering. The feeling of fulfillment you get is quite mind-blowing. That’s really what attracted me to the idea of building my own company. Having said all of that, I don’t think that starting your own company for the sake of starting your own company is a good idea. There’s got to be a solid idea behind it first. There’s got to be a solid reason for that company to exist. You need focus. I didn’t start my own company until we came up with the idea for Blinkx, because until that point there wasn’t a technology that I trusted to take all of the risks that are involved in starting out on your own. Once we came up with this idea, we were very convinced that it was the right thing, and we have done very well so far.

Forum Link: What did you do to find out how good the idea really was? Did you do any kind of validation in the market or did you trust your gut feeling?

Suranga Chandratillake: It’s actually much more the latter. We did do some validation of course, but actually, to start a company, the kind of energy you need to run a start-up, and the kind of emotional reserve you need to be able to go through the highs and the lows at any start-up, most critically, you have to have a belief in it. If you believe in something just because the numbers seem to point in the right direction, that is just not a special enough obsession. You have to have it in your stomach and in your heart. Obviously you need to process it all and analyze it all and explain the market particularly when you go through things like raising money. You have to be able to explain why it’s true, but the core team has to believe it deeper than that. That happens just because you and a group of your friends sit down and say, “This thing is huge, and we know it’s going to be huge.” We don’t know the exact numbers yet but there is just a good feeling here and we can do something very special here. That’s the very personal thing. You have to have that personal mission before you can make a thing like that successful.

Forum Link: Are you thinking about the exit strategy or are you hoping to run Blinkx as an independent for as long as possible?

Suranga Chandratillake: To start a company, you have to have the obsessive belief that it’s going to be something big and therefore your whole psychology is centered around being in charge and making it big and doing it yourself. The interesting thing at Blinx is that we’ve been very successful in the sense that we started with two people and now we are over 40 and have $250 million of market cap. Every time one of those successes happens, it provides you with more feedback as to “this is good; you can do this yourself.” In that sense we are very focused on continuing to work on the business. Having said all of that, we are now owned by a group of shareholders who bought our shares in the public market. Ultimately they own the company; they are the company. That [means] if someone were to come along and say, “Hey we’d like to buy you,” it’s really up to those owners if you get bought or sold. From the point of view of how I feel personally, it’s absolutely about building the company into being the next big thing and being personally involved.

Forum Link: What are some of the key lessons that stand out in your mind from starting up Blinkx?

Suranga Chandratillake: There are lots of things. The first example is what we’ve already talked about which is the need for an almost fundamentalist belief in what it is you do. At the end of the day, any start-up is disruptive, that means that there are bound to be pressures against what you’re doing. There are companies that already do what you do or would want to, or would want to fight it. What that means is that you’re constantly struggling against the weight of the conventional. To do that and not stay in bed when you hit roadblocks, you have to have a great deal of emotional courage behind your idea and what it is you’re trying to do. That’s the first thing.

You have to be a very strong individual, fully committed to what you are doing. One of the best ways of accomplishing this is by having more than one of you, who all believe in the same goal. Great partners are a key ingredient. People are important. They are quite literally the difference between success and failure. You have to have people that understand what you do, that are willing to do whatever it takes to achieve what you have to achieve, and they’re doing it for some greater good around the company and what it stands for. It can’t be the sort of people who are just there to get up and work, and then leave at five. Obviously as the company grows, then there are more opportunities for that kind of person. Certainly when you’re a 20,000 person company then you can have many employees like that, but in those early days, it’s important that you pick the right kind of people: the kind of people who really fit in and are going to work as hard on it as you are. It’s very important to keep them motivated that way.

The final thing is flexibility. Particularly if you are an early starter, you are working in a market place that is changing rapidly. We knew that online video was growing and that it was growing very fast. We knew that our technology would give us an edge in that marketplace. We thought that video search was the key market that we could work on and to date that’s been the key market for us, but I think advertising might be as big, if not bigger, for us. We didn’t know that on day one. You have to remain flexible and open to new possibility. There comes a time in an early start-up when someone comes to you and says, “Hey, do you do this?” and it is not really what you do. You need to have the guts to think to yourself, if we did that, it could really work for us, and be able to change in mid-flight. It’s a great advantage you have as a start-up that you don’t have 20,000 employees that need to be tasked on something. That flexibility is really important.

Forum Link: When someone comes to you and wants to take you in a different direction, how do you know you shouldn’t say no and stay focused on what you were doing? How do you know that it is the right time to say yes?

Suranga Chandratillake: It’s a very hard problem, and there are no easy answers. I’ve seen people who have an MBA-style background who have these voluminous numbers of spreadsheets and try to predict that this is the right or wrong thing to do, but it’s all rubbish because if you actually look at the spreadsheets, you realize that many of the core numbers are predictive. They are forecast numbers and they don’t actually mean anything and the market can change in ways that they don’t ever expect. You can analyze it, you can listen to your gut, you can listen to people, you can talk to other people, you can share it with the people you trust. At the end of the day it’s a combination of all of those things, which goes back to my first point, that you’ve got to be a pretty brave person. You can take the information that you have and run with it and not worry about it every five minutes, because if you keep having doubts, then you won’t be able to move fast enough to make it a success.

Forum Link: What is your definition of entrepreneurship?

Suranga Chandratillake: Entrepreneurship is the art and or science of spotting an opportunity and then having the guts and the energy to exploit that opportunity. That’s it really.

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