Ranovus: Why embracing disruption can spark innovation
Hamid Arabzadeh, the CEO of Ranovus, captivated the audience yesterday at the third instalment of MaRS Mornings, a monthly breakfast series at MaRS celebrating entrepreneurs who are disrupting their industries. At the event, Hamid shared lessons learned during his long career as a serial entrepreneur and why Ranovus is on a path to disrupt the future of data centre operations.
Unlike most people, Hamid “welcomes being disrupted.” Perhaps this attitude was instilled in him at an early age when his family left Iran in 1981 during a time of war, or it may have developed throughout the many transcontinental moves he has made for his career. Having lived on four continents and worked in over half a dozen countries, Hamid is nothing if not worldly.
He joined Canadian telecom giant Nortel in 1995, a position which took him around the world from Mexico to Brazil to the United Kingdom. In 2003, he moved to Germany to join Core Optics, a designer of digital signal processing solutions for high-speed optical networking applications. He grew the company steadily over the next six years before eventually selling it to Cisco.
It was at Core Optics that Hamid said he learned a key business lesson. In 2009, when telecom companies suddenly had less capital to buy Core Optics’ technology, the company’s revenues dropped by almost 30%. How did they bounce back? The company’s entire staff took a salary cut in order to invest into its next-generation product. Having a team with extensive knowledge of the market was the key to understanding why the company’s revenue dropped, correctly predicting that it would rise again and positioning the company to take advantage of the market going forward.
After Core Optics, Hamid was ready for a new challenge. In 2010, he returned to Canada, where he founded Spoke Technologies, a Toronto-based incubator focused on security, cloud and mobile technologies. Spoke is engaged with several great companies, including Identos and Impressed, and it was through Spoke that Hamid became engaged with Ranovus, a company very much involved in the optics sector.
Ranovus was founded in 2012 when telecom giants such as AT&T, Verizon and Comcast, among others, were declining and Web 2.0 companies such as Google, Mircosoft and Amazon were taking off, growing at a rate of over 200%. Data centres were on the rise and over three-quarters of their traffic was inside the centres themselves. Historically, multi-fibre cables have been used in the industry, with limited transfer rates and high costs. Yet more than 95% of today’s global data traffic touches a data centre and this traffic is expected to nearly triple in volume from 2013 to 2018. Ranovus’ single-fibre technology offers power savings and a smaller footprint, all for a cheaper price. The company continues to revolutionize the data centre market and, having raised $35 million in financing over the past 12 months, it is well positioned to disrupt the industry.
Throughout his MaRS Mornings talk, Hamid shared many insights for budding entrepreneurs. Here are a few of the more memorable ones.
- The majority of startups lack in-depth market understanding and have no experts on the team with international connections who can properly evaluate the value proposition.
- It’s important to maximize non-dilutive sources of capital before equity investments.
- It’s challenging to find and retain the right talent. This is a reoccurring topic at Ranovus’ board meetings.
- Understanding competitive analysis is critically important. At Ranovus it’s a focus for everyone in the company, not just a single business unit.
- Investors should be joining you on your journey, not interfering with your development path.
- Hardware investment is hard to secure and many investors will not even look at hardware plays.
Ranovus has been around the MaRS ecosystem for several years, building connections throughout the cleantech, Internet and communications angles. We all look forward to seeing the results of the next disruption in Hamid’s life as an entrepreneur.
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Jennifer MinelliJennifer manages the accelerating ventures program at MaRS, supporting high-growth ventures in the cleantech, health and information & communications technology (ICT) sectors.See more…