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A brainwave turns into a success story

Shanthi Shankarkumar

Great Internet exchanges are sometimes sparked by the simplest of verbal exchanges. Old friends, Bharat Sastri and Joe Tung met for lunch one November afternoon in 1998, when their conversation took a momentous turn.

"I was trying to convince him that he should solve a problem for some friends of mine who had just started a chip company. At the same time he was trying to convince me to design a chip for a product that he was interested in doing," recalls Sastri. That's when the light came on -- and how!

"We realized that this was not an uncommon situation. There is always somebody with a technical problem and somebody with a solution for it. But there is no incentive to follow through other than goodwill or friendship. So we decided to formalize this mechanism and create an exchange for this type of activity," said Sastri.

At that time Sastri was Chief Executive officer at Quantum3D Inc, a company in San Jose, California, making graphic chips and software. Tung was principal software engineer at Faroudja, Inc, in nearby Sunnyvale.

Hellobrain.com, for which Sastri is the CEO and Tung, chief technology officer, is one of the first Internet-based virtual marketplaces for the exchange of technology solutions. For instance, a company may need a key piece of software code, a hardware design or technical-writing services. It then anonymously posts its need or problem on the site. They then explain to HelloBrain how much they are willing to pay, HelloBrain subtracts a percentage ranging from 5 to 25 per cent, depending on how much work it thinks it needs to do to get parties together. The final price is then posted on the site for potential sellers.

During the course of the development, specific portions of the solution can be provided to the buyer for testing and evaluation, using certain secure escrow capabilities built into the exchange. Payment as well is escrowed by the exchange, with the buyer depositing the agreed compensation at the commencement of the project.

At the completion of the project, the final intellectual capital - a computer program, chip design, a CAD layout, the coding of a DNA sequence is delivered electronically through the exchange and HelloBrain releases payment from escrow to the solution provider. "This is all possible because virtually all aspects of human knowledge, especially those relating to technology can now be represented digitally. Consequently, it can be exchanged electronically, just as we trade securities and money," said Sastri.

In recent years, as a result of the increasing complexity of products, companies are increasingly outsourcing to third parties, significant portions of product development. This is in contrast to the days when corporate giants like IBM could engineer any product of any complexity using their store of intellectual property and internal technologies. But those days are a thing of the past.

"People -- with some admiration -- call Dell Computers a 'virtual company' because they outsource everything!" said Sastri.

Yet another example of the new trend, is Nintendo. The Nintendo 64, which has sold over 15 million units, utilizes electronic-design intellectual property, not just simple physical components from a multitude of software companies.

It took Sastri less than 30 minutes to get a $ 3.5 million funding for his start-up. He told John Walecka, a partner at California-based Redpoint that he wanted to start an "eBay for the high-tech industry".

"It was the easiest way to explain it, but there is one basic difference - we don't do auctions," said Sastri.

Of course, selling Beanie Babies is a totally different e-game from selling technology, so HelloBrain had to create an expert system and all of the tools that will support product development in high technology.

One cannot say for certain how big the market for such a service could be. There are any number of business-to-business marketplaces offering goods and services for a specific industry, for example, e-Steel Corp and Commerce Once Inc, but by 2003, business-to-business electronic marketplaces are expected to be a $ 1.13 trillion-a-year industry.

A site like HelloBrain allows its customers to get products to market quickly and lets them draw upon worldwide expertise. Typical users will be semiconductor makers, networking equipment makers, personal computer and information appliance manufacturers, software publishers and even biotechnology companies. According to analysts, over $ two billion dollars will be paid in 2001 for acquired intellectual property in the semiconductor industry alone.

There are sites like eLance, Guru.com and others offering similar services, so what has made HelloBrain.com the buzz of the e-world in such a short time?

"There are lots of people doing similar things, but they're primarily low-end services. The kind of design and validation we need has to be bulletproof when you're designing a big piece of software or a big e-commerce site. The reason we're on top of things, is because we are all engineers," stresses Sastri.

HelloBrain's approach is also different in that it is one of the first electronic marketplaces to sell intellectual property and services. These kinds of transactions are time-consuming, complex and expensive. Since the site went live in December, they have received over 60 plus real problems.

Besides providing a site for intellectual property, HelloBrain also intends to create a forum where people can collaborate not only on specific projects but also on technology, on ideas-a place for information, private conferences, seminars, high-tech discussions.

The company's striking name harks to a marketing slogan, "hellobrain" used when Sastri was at Silicon Graphics. Besides, it makes people think about what they are actually doing, which is connecting the best brains in the world.

Sastri, 46, has over 20 years of experience in engineering and management experience in the development of products ranging from workstations to embedded DRAM-based VLSI design. He graduated with a degree in computer science and electrical engineering from the Indian Institute of Science, Bangalore and came to this country in 1973 on a job transfer.

Before starting hellobrain.com, Sastri he was CEO of Quantum 3D, a company making high performance visual simulation products. Prior to that, he was VP of systems design at Alliance Semiconductor, where he worked on developing embedded DRAM-based VLSI designs targeted at graphics and networking solutions. Sastri was also the founder and CEO of Pellucid (1993), a mass-market 3D graphics VLSI company.

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