In Conversation with Varun Arora of HomeCamera

Pledging itself as an easy-to-use home monitoring system, HomeCamera was borne out of M1′s R&D lab. Since then, the two founders Varun Arora and Li Yi have spun off the company into Pechora Technologies to commercialise HomeCamera. They have since raised about 200k so far and are looking to raise another round. We managed to grab Varun for an interview.

Hi Varun, thanks for agreeing to this interview by SGEntrepreneurs. What project(s) are you working on now?

For the next year or two, we’re 100% focused on building and enhancing HomeCamera. Our vision is to be recognized as the most pervasive, secure, and easy to use monitoring system in the world, and everything we’re doing now is towards the realization of that vision. We wake up in the morning and ask ourselves “what are we doing to ensure HomeCamera works with an ever-increasing set of devices and that it’s available to an ever-increasing set of users”.

How and why did the idea of HomeCamera come about?

It’s a story of recessions (2 of them!), serendipity, luck… ingredients for a Bollywood flick except that we didn’t have any ladies so we couldn’t quite run around trees and break into song… Unfortunately, the story’s as long as a Bollywood movie (hopefully it’ll have a happy ending too!).

The genesis of HomeCamera was during our days with M1. Li Yi (who’s our co-founder and CTO) and I used to work at Wireless Intellect Labs, which was an R&D subsidiary of M1. When MMS was being discussed – prior to its commercial introduction – someone at M1 said “it would be nice if a childcare centre operator – who doesn’t understand technology but hopefully understands something about children – could set up a webcam that parents could then access using SMS and MMS”.

We thought that was a clever idea, built a proof of concept that won us an award at a code camp in Beijing, and realized we were onto something. Our business model then was to build the core technology and license it to third parties for deployment. The dotcom bust happened around then (recession #1) and we found no one was willing to build on other people’s technology, given it was difficult enough for them to sell their own. So we generally put this aside, did some other work for a few years mostly on backend telco technologies.

Then, in 2007, we found that what we’d created in 2005 was still the easiest system out there! Blogs and AdWords were fast making it possible for a small company to build a global brand at an infinitesimal percentage of what it used to cost, so we said let’s build this, put it out there, and see what happens. We built an early alpha, made it available to folks, people started signing up, and we concluded HomeCamera had legs and was worthy of serious pursuit.

What makes HomeCamera different from other home surveillance systems?

First, HomeCamera is -not- just a home surveillance system. While home users constitute the majority of our current target market, at its core, HomeCamera is a software as a service that makes it easy and affordable for non-technical “everyday” Internet users, worldwide, to monitor what’s important to them using the webcams they already own. Today, subscribers in 180 countries use the service to watch over their homes and families, their businesses, their children’s creches, and more.

The system is easy to setup (no technical knowledge required, no fussing about with the router), easy to use (we have retirees who’ve mastered the system), and very affordable, since it doesn’t require you to go buy a new $200+ camera. Just use the webcam you already own. And with over 250 million webcams in the market, that’s an awfully large addressable market. Especially when you factor in the freemium business model – our intention is to keep a Basic service offering free, always, to enable as many people around the world to benefit from HomeCamera as possible, while charging a very affordable sum (US$ 29.95 per year) for the Premium service with all the bells and whistles.

When you now put together ease of use and low adoption costs, you take away the adoption friction and enable all kinds of applications, from the serious to the marginal. With our technology rapidly getting to where we want it to be, the game is increasingly going to be about channels and distribution. Which is another area where we differentiate. While most people follow a Web-only distribution model, we think that’s not only suicidal but it also leaves WAY too much money on the table. The reality is, any business that’s Web-only faces serious threats from other Web-only startups that are absurdly well funded (and even in this economy, it COULD happen…).

On the other hand, by working with ISPs and mobile operators, we give them a service that they can take to their subscribers (thereby creating revenue opportunities for them and also differentiating them from their competitors who’re more laid back) – that increases distribution, awareness, and revenue opportunities for us.

Interestingly enough, just 4 weeks ago, Nortel released a study where they found that the #1 – number ONE – service that broadband customers want from their carriers is home surveillance. Combine this with our recent win at the Broadband World Forum in Paris – where we received the IEC InfoVision Award – and the message is now simple: this is the #1 market need and we’re the #1 provider. Not too bad a position to be in. And I haven’t even started on the entire hardware surveillance market, which is a huge huge channel to market for us. :-)

A bit long winded, but I hope your readers understand better what makes us different. I also wanted to use this as an opportunity to encourage other Internet entrepreneurs to think outside the box – the Web alone ain’t gonna cut it.

How was Pechora Technologies started? How did you meet your co-founders?

You’ll recall I mentioned that HomeCamera’s genesis was in M1′s R&D lab. My co-founder – Li Yi (who’s a technology wizard and a real rocket scientist – he actually did a stint at NASA!) – and I worked together there for 6 years; he headed technology, while I ran the company.

We were both passionate about what HomeCamera could do and where it could get. When the recession hit and it became clear that M1 couldn’t pursue this opportunity, we asked for the rights to take the technology out of M1 and build a business on our own. The folks at M1 were gracious enough to allow it and encouraged us to pursue our dreams.

Take us through the first three months of the business.

Tough. A lot of thinking, a lot of development, a lot of stress, and the sinking realization that our assumptions on raising money were totally off the charts.

As we worked on setting up the company, two of the smartest business brains this side of the Milky Way (I hope they’re not reading this or I’ll never hear the end of it!) took us under their collective wing. Andrew Shields (who’s now our Chairman) and Andrew Carmody (on our Board of Directors) came in and slowly but surely worked on our technology-centric brains, helping us add business understanding to the mix.

We spent the first few months figuring out what we wanted to be, what it would take to get there, how we were going to go about it, etc.. I’ll be the first to admit we also wasted precious time trying to raise money in an environment where people had stopped going to restaurants, far less actually fund startups! We didn’t think it would be easy – but people were hurting really bad, having lost (some in real terms and some theoretically) serious sums of money in the stock markets, real estate, currency, you name it.

So, on the one hand institutional funding had gone dry and on the other we had real costs to contend with – with real patents granted in several countries and winding their way through others, we were quickly burning through what little cash we had between Li Yi and myself. Fortunately, friends and family figured we knew what we were doing – or had a good chance of figuring it out anyway – and helped us along financially.

The subscriber base kept growing, we continued to receive plaudits (we were recommended by The San Francisco Chronicle around this time), and we invested time in developing a very good understanding of the business, backed with solid data from the likes of IDC and others. Around this time, we applied for the Spring TECS POV too.

What did you have to do to get HomeCamera to its current stage?

Work hard. Pray. Work hard some more. Pray some more. Rinse, lather, repeat. Surround ourselves with really smart people who could guide us, listen to what they had to say, listen to what potential partners had to say, continuously refine the model, keep meeting people, and keep plugging away. I think there’s a fair amount of luck involved too. For us, while I can’t say anything’s come particularly easy, when it HAS come it’s generally been at the right time – when we were ready for it and could leverage what came our way smartly and appropriately.

Tell us about a particularly difficult time. Was there a turning point in the journey?

Undoubtedly the Spring TECS POV grant. We worked hard at it, ensuring that we communicated clearly to the Panel that what we were building would be globally disruptive. Indeed, there’s plenty still to come from HomeCamera that we’ll be ready to talk about closer to mid-2010, which is being driven thanks to the Grant.

In this regard, I think it also helped that by the time we went in front of the Panel, we’d already started acquiring channel traction: we’d signed our first ISP deal (the ISP found us on Google – and this is what I mean when I say luck – they found us, they did all their internal demos on their own, we had to meet them ONCE to sign!), we’d signed our first value-added distributor in Europe, we’d jointly exhibited at the Mobile World Congress and seen very encouraging response, etc, and the Panel could see that they weren’t going to be pouring money into a company that was going to roll over and die, but, instead, into a company that would appropriately leverage that to thrive.

I think this is one mistake a number of people make… they don’t realize that for the Panel it’s critical that public money be wisely spent, to give a push to companies that’ll use the energy to climb the mountain rather than fall over a cliff.

How big is your team now?

Full-time 4, though our Board is fairly hands-on.

Team pic.

What is your expansion plan for the company to take HomeCamera forward?

We need to bolster the tech team and the business team. We’re looking for a committed and experienced channels person, with passion, drive, and “real” contacts in the small-to-mid-sized ISP and mobile operator space. (As a conscious effort, we’re avoiding the large ISPs and telcos for now – those deals generally come with a giant sucking sound… the sound of an industrial vacuum cleaner sucking up your time and money… we’ve been there, we know how it works, and we know what mistakes we don’t want to repeat; we’d much rather go for the smaller, hungrier, more aggressive, and more marketing-focused operator).

Other than that, we’re in the process of closing a small seed funding round (we’ve raised over 200K so far from friends and family, and are now looking at bringing on angels – or angel-oriented early-stage VCs – who can add value beyond money; we’ll be looking at working with Spring SEEDS on a matching round as part of the current fund raising). The objective of this round is to get to a stage where the product has paying subscribers, sign another 3 ISPs / telcos, another 3 hardware partners, and then work on a formal Series A.

Where do you see the home surveillance industry in three years?

If all goes well, we’ll have helped grow this industry significantly, by doing away with the old technology challenges, making monitoring easy and affordable to anyone and everyone around the world on any device and any platform. To us, the peace of mind that comes with knowing your child is okay, your home is secure, your factory is not on fire, etc…. well, that peace of mind is a basic human right, and we’re working hard to contributing to it in our own way.

Where do you see HomeCamera in one year?

With the help of colleagues, partners, investors, the government, friends, family, and God: nicely profitable, about to make the big “warp jump” into super-scale, well on the way towards realizing our vision, showing the world that Internet success stories don’t necessarily come from the Valley but, with the right guidance, can also originate from “the little red dot”.

What are the three qualities you think an entrepreneur must possess?

Persistence, the ability to listen uncritically, and the ability to get people to buy in on your vision.

What do you think is the most common misconception about entrepreneurship?

That you have to be incredibly smart. You don’t. And you don’t have to look far for an example of someone with barely survival intelligence who’s managed to get by. In this company, my co-founder is the rocket scientist. Me? I can barely differentiate left from right.

Thanks, Varun! All the best with HomeCamera.

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