TechDay had a chance to speak with the CEO of Ruckus Wireless, Selina Lo, at the recent Big Dog partner event. Note: this is the full transcript of the interview that appears in this month’s issue of The Channel.
TechDay: You started Ruckus in 2004, is that right?
Selina Lo: Ruckus was actually founded by two technical guys before 2004. They went to Sequoia Capital and asked them to incubate them, and while Sequoia was incubating my two co-founders, that was when they came up with the idea. I was introduced to them in 2004 when I was trying to install a television into my bedroom. I’d had all sorts of cabling problems, so I called up my friend at Sequoia, said I’d heard he had two guys developing some kind of digital home wireless product, and asked if they had it yet because I wanted to buy some. He said, come meet them. So I met them, I saw the technology, I thought, wow, this is interesting, so I invested and joined them.
TD: So that’s eight years ago now, that’s a long time in technology. Did you see it moving in this way when you first started?
SL: No. When we first started we were targeting the consumer wi-fi market. That was with our IPTV products. We were very successful, the technology worked, we pretty much got all the major IPTV operators as our customers, but we found that wasn’t the market we wanted to be in long-term. Most of the customers wanted to embed our technology into set-top boxes and DSL gateways, and we really did not want to get into that. We are a wi-fi company. So we decided to take the technology and broaden it out to other segments instead.
In 2008 we introduced our enterprise product. In the beginning of 2008 I still thought it was going to be a pure enterprise product. Then in 2009, I remember when both Trapeze and Meru were up for sale, because of the financial crisis, when I looked at the kind of valuations they were getting, I thought, they are really not getting very good valuations because they are not the number one or number two players in their market. So I thought, I have to find a space where I can be number one or number two. That was when we decided to expand into carrier wi-fi and look for unique things that we could do there.
TD: That’s obviously why you’ve chosen to remain a niche company rather than go into other areas.
SL: Yes. If we were to stay in the enterprise wi-fi business, we would have to do a lot more things like firewalls – basically, we would have to copy what Cisco and Aruba are doing. Then we’d also have to compete with them head-on in terms of the size of the sales force and so on. I just didn’t think that strategy would pay off that well. However, the mid-tier enterprise had really taken to our technology, so I didn’t want to abandon it either. So we decided, let’s stick with the mid-tier enterprise and focus on the technology that mattered to them – which is how robust the RF technology is – and then let’s look at other markets where that technology really is necessary, and be the first one there. That was carrier wi-fi.
TD: How have you found competing against the big companies like Cisco and Aruba?
SL: You have to focus on where you are strong instead of letting them dictate the agenda. RF is where we are strong. That’s our strategy against Aruba and Cisco. Also, the channel is really important. Neither Cisco nor Aruba do the channel right. Cisco are very focused on the big channel, the guys that can move tens of millions for them. The little guys don’t get any attention. Aruba is a direct sales company, so they compete with their channel. That’s why for us, other than technology, having the right channel attitude, the right programs, the right machine, is where we are strong.
TD: With regards to your channel program, do you spread pretty wide or do you have a few partners? How do you like to structure that?
SL: It depends on the market. You don’t want to overdistribute to the point where the market is not growing as fast as your channel is growing. Then you end up having partners competing with one another with your product. That’s when they start going and having price wars. You really need to size your channel right for the market. In most places we tend to have at least two distributors so that there’s some competitiveness. In the case of New Zealand, our distributor here, Connector Systems, has been doing a fantastic job, so we haven’t had to use another one as, let’s say, competitive encouragement. The market share here, we have twice that of Australia, so I think we’ve been doing something right here and we’ll continue to do that.
My philosophy on channels, though, is that timing is the hardest part to get. When you’re too small and you sign up a very powerful channel partner like Ingram, you get into trouble because you get lost. Once you get to a certain size, though, you really need that kind of channel to move things for you. Figuring out that timing is the most important thing.
TD: You mentioned in your talk that you’re planning to go public – how long have you been considering that?
SL: From a numbers perspective, we’ve had the numbers to go public since 2011. For me, though, going public is not the end, it’s a means to an end. For us the ultimate goal is to build a company. Going public to me is just a funding event. It’s necessary for big companies like tier-1 operators to see that we are going to stick around, and also for our employees it’s a validation of their work, so in a sense the reward of an IPO is emotionally important, but I also want to make sure that I do it right. I don’t want to be one of those companies that IPOs and then a year later the stock crashes because I didn’t realise the channel had stock [in inventory]. For us, having the infrastructure to operate a company predictably is one critical requirement.
TD: With a lot of tech companies the goal is just to get big enough to sell off, has that ever been something you’ve considered?
SL: This is my third start up, and my philosophy is never to build a start up to get sold. Otherwise, you end up optimising the company in the wrong ways. The only thing I can control is to build a company that can sustain itself. Along the way, if somebody offers you a price that you can’t turn down, you sell. From our perspective right now, our company has built a lot of value. I’m not making any assumptions about acquisitions. I’m just marching on forward.
TD: The quirky character of the company – is that something you’ve deliberately put in, or is that just how you roll?
SL: We are all quirky people, that’s true. But we like it, we like personality. It’s very important. It’s important for our employees, it’s good for our partners, and even customers like it. It’s very important for us to have a personality. We are proud of our technology, we are a little bit geeky, but we want to have fun as well. People want to work with fun people. Like in our channels, I want to create this loyalty where they feel like they’re part of a pack. Without a personality that’s very difficult, you are just tied together by interdependency. If you have the same personality, there’s a little bit of an emotional aspect to the whole thing.