What was your background when you co-founded Kerlink? And how did it happen?
I graduated from a French Engineering School as a Telecom Engineer with an additional specialization in real time communication from the Canadian University of Sherbrooke. I started my career as a development engineer at the French Ministry of Defense in 1993 just when mass internet was coming into the fore.
In 2004 Wavecom, the company that I had joined 4 years previously, was undergoing a large restructuring programme and I was at a point in my professional career when I did not feel I wanted to continue in a simple employee role. So I co-founded Kerlink with two of my colleagues from Wavecom as we were sure there was a potentially firm business opportunity in M2M and telematics solutions. We were quickly proven right as we
immediately signed our first contract with the two French car manufacturers Renault & Peugeot, for whom we created solutions for public buses route operations.
Looking back, I believe I have had entrepreneurial qualities since the beginning of my career. Even at the Ministry of Defense, I was given a budget to create a research laboratory that I had to manage myself.
What has been the key factor of your success? What would you suggest is the most important professional quality to focus on acquiring?
As partners we had a great deal in common; common aspirations and complementary ways of getting things done- we balanced each other. These qualities were a very definite key to our success. My two partners were much better at the organization side of things than me, while I was more passionate and focused on the technology side of things.
Other keys to Kerlink’s success in the last 14 years are the company’s vision & market anticipation skills. There are also things you don’t learn but rather acquire with experience, things that require you rely on your gut feelings and intuition. Other important personal qualities are openness and the ability to listen. Finally, you need to believe in yourself and in your capabilities to be successful.
What are the main lessons learned and tips you would want to share with our readers (regarding your entrepreneur experience as a co-founder of Kerlink)?
What is important to keep in mind is that it always takes much more time than what you initially plan for or expect. Usually business plans are drafted with 2 years in advance on reality. That’s why, what you really need to secure is patience and cash.
Also, it is common to say that the 3rd year in any business venture is a tipping point and the hardest to overcome. I have felt like the 3rd year is every year! Even today, I feel we are facing difficulties all the time. The dominant feeling we have with the other co-founders is that we have had significant bad luck, a tough ride – we have faced every possible disaster and complication an entrepreneur could possibly face. It is probably not true looking at our successes but, we do still feel that we are constantly tackling challenges.
Most people in the Tech Industry, especially in the US, want to raise money. What advice would you give an entrepreneur in IoT?
It took us 5 years before we closed our round A. We had the chance to leave Wavecom with some cash and we started with a contract that generated revenue from the very start.
Even though the US tech scene made raising large amounts seen as an achievement and an end in itself, my advice would be not to rush to raise funds. As entrepreneurs we want to bring a successful new product or service on the market and generate revenue. Fundraising is just an enabling factor, not a final objective.
At Kerlink, we also went public recently. It’s a good way to achieve a higher company valuation and therefore raise more funds to enable new investment and extend the lifetime of the company as long as possible.
It also provides more visibility and credibility on the market as our accounts are made public. We are now able to bid directly for large tenders that were out of our reach before, even though we had raised 30M€ in equity.
You are based in the US as CEO of the US subsidiary. In addition, you are since previously Kerlink’s CTO.What does a CTO role at an IoT connectivity solutions provider consist of?
It consists of 3 main roles:
1. Technology Analyst : I would define it as translating the strategic roadmap into product & solution developments. This basically means extracting, evaluating and selecting the technology to implement from the global strategy. This required technology then defines the technical specifications that will drive each product & solution development.
2. Innovation Officer : The second role is linked to our innovation policy and consists of managing our patent strategy. To date, we have 10 patents registered which are technology wise, meaningful and transformative, whether defensive or offensive.
3. Standardization & Partnership Facilitator: The third role which is absolutely key in the IoT sector is the management of partnerships within the ecosystem, whether it is with technology partners, business partners or standardization organizations such as uCIFI or the Lora Alliance.
Do you think that experience in a purely commercial role would have been more helpful than a CTO to lead an operational entity like Kerlink Inc. in the US?
Yes, the commercial experience is absolutely key to growing the business, especially in the US. As CTO in my own case in particular, I do not have the skill set to sell. Therefore, my first action when arriving in the US was to recruit a Business Development Manager, not just a Sales person, who could identify the adequate entry points to our markets, build partnerships and analyze our markets in depth.
Where do you see the biggest market potential in terms of geography and verticals?
To make it simple, we have 2 types of market approach on LoraWan (non-licensed technology) today. We either address:
1. Public operators who will sell connectivity, or
2. Private operators who will deploy networks for their own needs, typically like Smart Cities or utility operators for their smart metering, gas, water or electricity needs.
My view is that the market is dead for public operators who just sell connectivity. Therefore, growth is best assured in private operators who deploy networks for pre-defined use cases. If the use case is not there, there will be no network deployment.
Even though this fact is valid in all countries, it is more obvious in the US because there is a lot of lobbying from private operators or their ecosystems and no public operator today has the financial capacity to deploy a nationwide IoT network, not even the Tier 1 operators. So, to make it work, we actually need groups of smaller private or public networks to cover the whole country.
As a result, we are now moving from large nationwide operators representing one major client to multiple, smaller operators, sometimes at city level who represent many multiple clients. The main challenge is in fact to enable these small networks to inter-operate, allowing data to circulate from one network to the other.
Are you saying that a pure connectivity provider cannot survive without bringing value added data management or device management, even a private one?
Yes, exactly. IoT is in fact a very modest part of the traditional telcos’ turnover, even in their revenue forecast. Therefore, the profitability of their IoT business depends on the amortization of their investment which comes from:
2. License cost on public licensed networks
Because the communication cost of IoT remains high, a connectivity operator has to deploy on a proven use case (street light, street metering, street farming like in India, asset management… ) with a clear ROI vision, even if he deploys a private network. The connectivity is just the enabler.
IoT Markets: US vs Western Europe
If you had to compare the US and Western Europe IoT markets, what are the three main differences you would highlight?
From a business standpoint, the requirement on every vertical application is clearly identified today in all domains (airport, asset tracking, smart metering, smart city…). Market access in the US,to the contrary of Europe where we can use System Integrators, is only possible if you have a proven end to end solution to offer. Credibility on the US market itself is absolutely key. So even if you are a leader in Europe which is Kerlink’s position today, you are not a serious player in the US without American references. In this sense, the US market is actually quite contained.
From the players’ standpoint, the US market is very wide and therefore very competitive with different levels of maturity and different forms of technology co-existing. Clearly, we have competitors here that we do not see in other markets..
We see less of these constraints in Asia (outside China) and in Europe. The US market enables one to become a leading player as long as you offer an end to end solution and enable clients to make money, even if your technology is not the best on offer.
What about the IoT Talent scene? How does it compare to that of Western Europe?
We have the impression that in general, technology prowess is actually lower in the US compared to Europe or even in South East Asia. Technology is less complex and less valued. But the go to market expertise is very strong and well respected – converting technology into marketing & business strategy is their strong point. So typically, engineers who can also do market strategy are very much sought after here.
People who develop technology and products in the US are expected to wear a marketing hat as well.
Do you consider that experience in the US or Western Europe is a must for any IoT professional?
From an HR standpoint, the ideal candidate should be trained in a French/European engineering school and complete an American MBA and a professional experience in the US.
But I don’t think it is a must to go through the US. Some people we work with at uCIFI are highly skilled and effective in their roles, without having worked in Europe & US (typically professionals from Asia or the Middle East). The most important perquisites for me are to remain open minded, demonstrate adaptability and really tailor-make your offer and the way you bring it to the market to each specific country.
But is for sure the US is the easiest market to demonstrate your skills and to kick off your career. I would put it this way: in the US, you can grow and show your talents everywhere, whatever your academic background. Here you are really recognized on your capacities to “do things”, much more than on your initial academic background.
Would it make sense to dismiss half your team in France and then relocate it to the US?
We have a very high engineering level in France and to have the same level of engineers in the US, it would cost me four times more. So, we really need to keep R&D in Europe.
It is a little different for the commercial teams. It could make sense to have a mix, with more Business Developers perhaps based in the US & Asia and fewer in Europe. In Europe we have cultural restrictions when it comes to market growth.
Send your questions to Yannick Delibie to : firstname.lastname@example.org
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