Startup Stories: Stoke CEO Vikash Varma
Editor’s Note: This is a Q&A series that features entrepreneurs and executives who have successfully guided their startups to maturity. It is meant to complement StartUp Beat’s coverage of early-stage startups and an effort to provide further insight into the experiences of tech entrepreneurs.
Stoke enables mobile operators to overcome limitations inherent in legacy approaches and architectures, helping them tackle 3G mobile data service delivery and successfully navigate their transition to 4G services platforms. The company was founded in 2004 and has raised approximately $97 million through five rounds of institutional funding, the latest coming from Samsung Venture Investment just last week. Stoke has also achieved six consecutive quarters of profitability.
Varma: My first foray into an entrepreneurial venture was my move from corporate management at Hewlett Packard to a startup, P-Cube Inc. I was President of Worldwide Sales and Field Operations and my role was to establish P-Cube as the market leader in IP Service Control solutions. When the company was acquired in 2004 for $200 million by Cisco it gave me a taste for the startup world.
SUB: What prompted you to start at Stoke in the first place?
Varma: To me, Stoke looked like the perfect combination of challenge and opportunity. The company had excellent VC backers, had technological leadership with their SSX platform and was positioned to play in the mobile broadband industry. The need of the hour was to structure a sensible sales strategy and channel partnerships to get us to top tier carriers. Looking at the competitive landscape, there was a real opportunity to be a truly disruptive force.
SUB: What were the first steps you took toward moving Stoke out of startup stage when you joined?
Varma: I joined Stoke three years after it was founded, in 2007. The first steps were to focus the company on 4G LTE market with the most advanced carriers in the world, like Docomo. I had to re-align the sales efforts, trim the unnecessary projects and focus the product roadmap to meet the requirements of carriers like Docomo, who truly define the market they play in.
Along the way, groundbreaking products like the iPhone brought the full browser-based Internet experience on a handset. This accelerated the adoption of devices on 3G and LTE networks. Managing the tsunami of data on these mobile networks and offering a robust security environment became a necessity. These are the two domains Stoke plays in—so we find ourselves in a really good spot.
Important first steps were to realign key expertise to match the market needs and determine the highest potential technology focus and most immediate revenue opportunities. I also put in place tightly defined metrics for every individual in the company to keep development on track and quickly identify and solve problems.
SUB: Was there a point at which you knew Stoke would hit it big? Was there a ‘tipping point’ (for lack of a better term) when Stoke really picked up steam and where it started growing exponentially?
Varma: In 2008 we signed nationwide rollout contracts with our first flagship customer. That was a huge breakthrough. In 2010, we saw the revenue start to ramp up exponentially—this became a massive endorsement of our business domain. On the backs of additional sales wins, we started to expand our executive roster with senior influencers from the telecoms world. Our most recent achievement has been our sixth consecutive quarter of profitability.
The Samsung Ventures investment is another high point, signifying confidence on the part of a world leader in mobile broadband about Stoke’s future.
SUB: If you had it to do over again, what would the first concrete step to establishing Stoke have been?
Varma: Stoke was originally founded in 2004 but had I been with the company then my approach would have been the same: to look for the highest-potential sales targets and focus our offerings on meeting pressing needs in long-term, high-growth markets.
SUB: What were the most significant obstacles to growing Stoke to maturity?
Varma: One of the biggest challenges is managing the growth—in our company, hiring, product mix and the expectation management of growing employee base. Small gaps in resources or processes in a small company can become major challenges in a larger organization.
SUB: What kinds of outside funding have you raised?
Varma: Stoke has gone through five funding rounds, concluding with Series E in early 2011. We’re very pleased to include long-term, high profile venture capital firms like Sequoia Capital and Kleiner Perkins Caufield and Byers among our investors. On July 18 this year we announced that Samsung Venture made a strategic investment of $5 million to foster a closer relationship with Stoke, bringing the total to approximately $97 million.
SUB: What was the metric/milestone that indicated to you that Stoke had moved past startup stage?
Varma: Recording a whole year of profitability in 2011 was a good moment. This year, we are very encouraged by being included in bids for major telecoms carrier business with three of the top five infrastructure vendors in the world.
SUB: What were the most important lessons you learned about entrepreneurship while building Stoke?
Varma: Be your own best critic—it will intuitively make you plug the gaps and improve the approach to building a strong company. It will also keep you on your toes instead of allowing you to rest on your laurels.
Vikash Varma is the president and CEO of Stoke. He brought 18 years of multi-disciplined experience to the position. Vikash has a successful track record of building businesses from the early stages to market leadership, most recently serving as the President-Worldwide Sales, Marketing & Field Operations at CloudShield Technologies. Vikash helped establish CloudShield as a leader in the multi-function service control and security market, operating in over 35 countries. Before CloudShield, Vikash was the President-Worldwide Sales and Field Operations at P-Cube Inc. with overall responsibility for Sales, Channels, Partners, Professional Services, and Support. At P-Cube, he successfully grew the business with top tier carriers around the world and established P-Cube as the market leader in IP Service Control solutions. P-Cube was acquired in 2004 by Cisco Systems for $200 million. Prior to P-Cube, Vikash was the General Manager at Hewlett-Packard Co. for the Internet Usage Manager (IP Mediation) Software business.