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Sunday, July 1, 2012

CFO SPOTLIGHT – Mahesh Karanth, Enlightened, Inc.


One of the currents running through Silicon Valley these days is energy efficiency and Enlighted Inc., headquartered in Sunnyvale, is at the forefront of the growing cleantech market. The company's systems dramatically reduce energy use and operating costs of commercial buildings. Six months ago, Enlighted's CFO, Mahesh Karanth, supported launch strategy and shipment of the three-year-old company's first product, a sensor-based lighting control system, to customers like Google, Hewlett-Packard, and AT&T. 

Karanth has led three startups through to IPO and mergers including InvenSense (which went public in 2011 for approximately $1 billion). He continues to lead the company's high growth path with financial strategies that will take Enlighted to the next level. In the following Executive Spotlight interview, Mahesh discusses the challenges he confronts in his multiple roles at Enlighted.

Q. Describe your company and its work.

A. Our products create energy savings of between 50 and 70 percent in commercial buildings. We have developed proprietary sensors that are simply connected to any existing lighting fixture in a building. Every minute of every day, our sensors measure people behavior, temperature, and many other factors. Based on this data, energy use is accurately, and subtly, optimized - all the time - not only saving time and resources for building operators and facility managers, but also creating savings and optimal levels of comfort. Our solution is now deployed at 35 Fortune 1000 companies, helping to manage more than 2 million square feet of commercial space. Right now, we have about 100 employees, and we are continuing to scale.

Q. Is business process a concern? Do you feel a need to reengineer processes or are you building them from the ground up?

A. At this early stage, I'm deeply involved in the operational side of things, working to build a budgeting and forecasting system and building our financial and data management infrastructures. I recently set Enlighted up with a manufacturer in Taiwan and a process for shipping from there to customers in Asia. Once our infrastructure is in place, my role will shift to making our operational processes as efficient as possible.

Q. How much time do you personally spend on accounting, compliance and tax versus strategic input and thinking?

A. I currently spend much more time on strategic aspects of our business. I'm very busy sourcing offshore support, particularly in manufacturing. I've been looking in China, the Philippines, Malaysia and elsewhere to identify our best advantage in overseas manufacturing. This is a very strategic endeavor, because it not only involves how we get our products to overseas markets, but also establishes Enlighted in those markets as a key player. That said, this initiative is very labor intensive in that I must help to ensure that quality is maintained at a high level. We perform constant testing so that our products are perfect when they are shipped. I must also collaborate with many different people in sales and customer support for example. In helping to recruit and build our customer support team, I have recently come to appreciate just how critical a world-class, efficient customer support team and function is when entering and establishing a company in new markets.

Q. How is this different from your experiences at other companies?

A. In other mature companies I've worked for, the issues were very different. At these companies, I was very concerned with down-in-the-trenches accounting and trying to ensure better processes for revenue recognition, stock options, and compensation. With Enlighted, at this stage, I'm mostly concerned with the creation of solid operational processes and an IT infrastructure to support them. I'm enjoying it tremendously, and I'm excited about the various stages of growth we have ahead of us as we continue to build our company and markets.

Q. So you are very focused on infrastructure, but you have many other responsibilities. How do you get your other core duties accomplished?

A. Yes, in addition to finance, I have responsibility for human resources, facilities, legal, and IT. It is quite challenging to accomplish all of the duties under these functions. However, because we are still a streamlined, efficient, and relatively small organization, it is still within my bandwidth to manage. As we grow, I will have to scale my own organization. A key responsibility of mine is to source funding, which is obviously crucial for any startup in its early days. I work closely with our CEO to source venture capital firms and local banks for working capital. We have a number of VCs on board and work with Silicon Valley Bank, a commercial bank that understands and supports startups. I've played a key role in raising more than $100million in my earlier startups from some of the world's leading venture capital companies including NEA, CMEA, Kleiner Perkins Caufield Byers, Draper Fisher Jurvetson, Artimen Intel Capital etc.

Q. Do you feel your finance organization is well aligned with Enlighted's priorities?

A. Yes, because at this stage, I'm involved in so many aspects of our growth that I have a very deep understanding of the company that makes alignment very natural. I've worked very closely with our CEO to establish benchmarking and commission structures for our sales team, as well as marketing and positioning of our company.

Q. You mentioned hiring. Do you have any difficulty sourcing the right talent for your team?

A. The hiring environment in Silicon Valley is challenging right now. Finding the right talent is a big theme at many companies including ours. Our strategy is to focus on bringing in very senior people in sales and marketing for example, and then leveraging their networks to fill in under them. If you have senior people with extensive personal networks, this makes sourcing talent a bit easier. 

Q. Has budget constraint factored into your technology purchasing decisions?

A. We are very careful and prudent about our technology spend as a matter of good business practice. Our aim is to build the most valuable company for our shareholders and employees and to be financially healthy and scalable, based on solid, market-drive and fact-based strategies, forecasting, and budgeting.

Q. What else do you supply to VCs and other investors to boost confidence and funding?

A. We create a roadmap to share with investors that demonstrates what we are doing and how well we are doing it. Here again, I work closely with our CEO and executive team to create a story or a narrative around that roadmap that is vetted and based on our customers' input. We emphasize how our core technology creates value for customers and how it can continue to solve their problems, save them money, and make their business lives easier. Thus far, we are very successful because we have created a real, innovative, differentiated, and affordable solution within a huge market - that of the world's commercial building space and total energy cost of operating those buildings.

Q. Do you have a cloud and/or mobile strategy in place and what is your role in that?

A. I led creation of our cloud strategy, which is critical, because it allows us to scale at any velocity.

Q. Describe your relationship with the CEO, executive team and other key stakeholders of the company. How do you go about developing these and other key relationships?

Every CFO is in a delicate position in terms of his or her fiduciary duties and the need to assist the CFO and the c-suite in promoting the company. You are part of a team, but you play an independent role, too. I work to create a partnership with the CEO and our key stakeholders. This results in mutual respect, a team attitude and most importantly, a high level of trust between me and our stakeholders.


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