When Ananda and his son are at a party and someone tries to explain a complex problem, you better not say, “Oh it takes a rocket scientist to figure that one.” Ananda you see is the rocket scientist who designed the now ubiquitous satellite-driven Global Positioning System (GPS). And don’t try “It takes a brain surgeon,” either. The son, Ajay, is a neurologist!
A resident of Westlake Village, Ananda was most recently in the public eye as the founding CEO of Stamps.com. A native of Kerala, he topped his undergraduate school in Coimbatore with a degree in mechanical engineering. This brought him to the California Institute of Technology where Ananda earned a master’s degree in aeronautics and then a Ph.D. in astrodynamics and control at UCLA.
He then went on to work at the famous Jet Propulsion Lab and the Aerospace Corporation where he earned the right to be called a rocket scientist as the navigational designer of several interplanetary missions and the architect of the ambitious defense project for GPS. He downplays the intellectual achievements. “As long as you can see four GPS satellites in the sky, it is just a matter of solving four equations for the three location variables of latitude, longitude, height above sea level and time.” In addition to designing the GPS, he worked closely with NATO and other entities to determine survivability of the GPS in a battleground scenario and this led him to an interest in secure communications.
I asked him if he had imagined that a department of defense project like the GPS would ever be so widespread. He smiles and pulls out a photocopy of a 1989 news story about him, which says “By 2001, most commercial aircraft and ships will navigate by GPS satellite. And eventually satellite navigation will hit the mass market: coupled with computer displayed maps, it could become an option on the family car.” Chalk that one up to a timely and accurate prediction.
Most of us would be satisfied with such an accomplishment in our careers. But the restless Ananda decided then to become an attorney! He still maintains the intellectual property practice of Ananda and Krause. While practicing law through the 1980s and early 1990s, he continued his work of secure transmission. He also launched a successful entrepreneurial venture called MicroSubstrates Corporation for which he obtained venture funding from Brad Jones of Brentwood Capital.
His son’s high school classmate was an MBA/JD student at UCLA in the 1990s. Along with two others, he wrote a paper about using the Internet to deliver postage and happened to tell Ananda’s son, Ajay, about it. Ajay told his friends about Dr. Ananda’s work on security, which seemed related to the idea proposed in the paper.
Quick to seize upon a new adventure, Ananda formed and bankrolled Stampmaster along with the three UCLA students. He hired an initial team in Bangalore, India, to develop much of the software. The kids and he took a redeye to Washington, DC where a spellbound staff at the postaaster general’s office watched their demo for several hours. “They stayed overtime and did not even get paid for it. It was a first in the history of the post office!” he chuckles.
The company became Stamps.com and raised over $450 million in two public offerings. Its stock spiraled over $90 but now languishes in the $4 range. The company staff went up to 700 people and it hired two different CEOs before settling down at a strength of 90 people. Ananda, who still sits on the board of directors, is still upbeat about the company. “The basics of the business are very sound,” he declares. “Small businesses find it inconvenient to buy postage and a postage meter is too much trouble for many.” Gross profit margins are over 60 percent and the company is still sitting on over $190 million of cash. Given Ananda’s intellectual property background, it is not surprising that the company is also sitting on a mountain of key patents. It also bought the assets of eStamp its sole independent competitor (curiously eStamp was also headed by an Indian American, Sunir Kapoor). “Stamps.com will now grow slowly and acquire customers in a cost effective manner.”
As CEO of Angels Now, a consulting firm, Ananda is focused on working with small, and medium size tech companies. Beside his two earlier start-ups, he is also a board member for NetAsset Management based in Santa Monica and Kerala. Many of his clients are start-ups who are looking to raise venture capital or for credit facilities. With his wife, he also funds the Ananda Foundation to educate poor children in India.
Recently Ananda has spent much time in China so we talk about the differences between China and India. “First, China has infrastructure to manufacture almost everything within its borders, while in India we still have to import many raw materials. Secondly, the Chinese strive for perfection but in India, we feel that 90 percent is good enough. There is no doubt that creatively and intellectually India is more advanced but China is catching up fast and the younger generation is also learning English very rapidly so we cannot be complacent about our language advantage.”
As one of the few people to bridge the gap between the aerospace industry and the venture-funded start-up world, I ask him why there were not more cases like his. He smiles “People in the aerospace business feel like they have a guaranteed job. There is tremendous inertia, and creativity is not rewarded. This does not make for a great mindset to build a start-up.”
Gunjan Bagla is a Southern California technology executive who helps companies to introduce new products/services and to build blue-chip customer bases. [email protected]