U. Mahesh Prabhu

Investor | Author | Media, Management & Political Consultant

MDN: A unicorn in the making

This article by U. Mahesh Prabhu was originally published in Swiss Entrepreneurs Magazine July August 2018 Issue. Reproduced in original form with expressed permission.  

In my brief experience as an investor if there’s one quintessential observation I’ve made, then it’s the fact that companies with potentials are the ones who maintain a low profile, invest in their people, focus on the opportunities, are patient and persistent in their pursuits.

Of a few dozen companies I’ve invested there’ve been only five that have paid a rich dividend on my investments. The rest have collapsed or on the verge of collapse. Those entrepreneurs who incur losses blame particularly on the unavailability of funds, the absence of a talented workforce, lack of government incentives and even bad luck.

Another important lesson I’ve learned, rather painstakingly, while it is hard to find a good company to invest it’s harder to comprehend them. Take for example the story of Manipal Dot Net Pvt Ltd (MDN).

MDN is a high-end hardware and software development enterprise based on the west coast of Southern India, approximately 400 km from India’s Silicon Valley Bangalore (Bengaluru), in a little-known town called Manipal. This place is particularly known for its academic institutions and as the birthplace of India’s leading financial institution Syndicate Bank.

However, all the great enterprises founded here looked elsewhere for opportunities and growth. Syndicate Bank’s national headquarters is no more in Manipal. Manipal Academy of Higher Education (formerly Manipal University) is investing in campuses around the world.

Given this scenario, one can barely fathom as to why does this high-end innovation-centric enterprise made Manipal its home. Although Manipal houses one of the finest engineering colleges in the country – Manipal Institute of Technology – it’s hardly anywhere close to the likes of Massachusetts Institute of Technology. So where does MDN gets its employees to work in its recently inaugurated headquarters in Manipal?

MDN has a simple strategy to address this situation. A good number of people from Manipal and vicinity with excellent academic qualifications and unmatched skills living in the United States of America often try to return to their hometown. In the absence of a viable enterprise to employ them locally, most of these people would move to now crowded, polluted as well as untenable Bangalore (Bengaluru). MDN makes good to offer them an opportunity to contribute to their professional careers and at the same time meet their objectives of returning to their hometowns. Of course, these people aren’t big in numbers. So, to compensate they have a second process of identifying talents who desire to live and work in Manipal and training them at their facilities with the hands-on project and eventually retain them with lucrative opportunities.

This simple approach coupled with unmatched persistence has made MDN a respectable company in the areas of Video surveillance, PCB design, AI/DNN, Computer vision/Image processing, Machine Learning, FPGA Design, Embedded systems and IoT. The company’s list of past and present clients include various US and UK firms, including Synopsys (NASDAQ: SNPS), Lattice Semiconductor (NASDAQ: LSCC), Freescale Semiconductor, NXP Semiconductors, and Maxlinear (NYSE: MXL).

The compelling reason behind the survival of MDN, I believe, is the vision of its founder & CEO – Dr. Narasimha Bhat. A gold-medallist student of Engineering from Manipal Institute of Technology, with master’s from Indian Institute of Science and Ph.D. from University of California, Berkeley, Dr. Bhat worked with Synopsys in the Silicon Valley for several years before recommending his employers to consider an alternative development center for the company’s visionary projects in India.

By starting Zeta Infotech Ltd (now defunct) with blessings from Synopsys and Manipal Group, Dr. Bhat proved his mettle, his unmatched team building skills and viability of his vision. However, once the home-grown team became highly successful it was acquired by Synopsys and moved out of Manipal. Unabated and relentless in his vision Dr. Bhat started all from scratch with MDN. Important to note the support of his friends Dr. UC Niranjan, Mr. Nagaraj, and his brothers, Dr. Prashanth Bhat and Srikanth Bhat. With almost a decade in business, MDN is certainly a tech unicorn in the making.

To have a grand idea is one thing but to bring the whole idea to reality is a whole different ballgame. Against all the landmark achievements of this company, including their joint venture project Freescale Tower System which was admired by engineers worldwide and won the 21st Annual EDN Innovation Award; and the Weiji AirLock, the world’s first device built to specifically address the EU’s nascent GDPR policy; the company prefers to keep a low profile. MDN only confirms one of my fervent beliefs in investing that companies can either earn publicity or profitability, never both.

To conclude here’s a list of facts about MDN

  1. MDN is a zero-bribe company, they have come this far without bribing any official during any process, be it approvals, licenses, permits, etc. According to Dr. Bhat “Our existence is proof that India is not as corrupt as is portrayed, and that there are sincere, honest, hard-working officials.”
  2. MDN is a zero-debt company, meaning it has never borrowed money. It has grown only at the natural rate possible, using only funds generated by sweat, toil, and trouble.
  3. MDN is self-reliant on the energy front (but only in summer), generating more than they consume.
  4. On all 3 above, MDN has no one to advise or guide them on these topics or for them to emulate. The company is on its own. So, MDN is a pioneer or “start-up” on these fronts too.
  5. MDN does not have a business-development/marketing or publicity department.
  6. All MDN clients have come to us through word-of-mouth from existing/former clients.
  7. The company has seen many triumphs and tribulations over the last 13 years, beginning from a small incubation center, moving to rented premises and now functioning in its own building.
  8. MDN has avoided taking on simpler projects that can be attempted by others in their vicinity, and stuck to complex projects that would not have been possible by local talent/training alone.
  9. MDN has a hiring policy that discourages job-hopping, to avoid creating chaos like in Bangalore.
  10. Even when not required by law, MDN has extended several benefits to our employees, such as Provident Fund, Gratuity, NPS, Health insurance, free continuing education, in addition to those dictated by law as well.




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