R&D magic

When VoodooPC was bought out by HP last year, it turned a few heads. Ravi Sood, CMA, hopes that the new global gaming unit that was formed in the process will continue to surprise, by encouraging an innovative mindset and a more open approach to idea generation.

By Robert Colman

When Hewlett-Packard announced in the second half of 2006 that it was in the process of purchasing high-end gaming PC company VoodooPC, many tech bloggers and pundits were mystified. After all, what could the multi-national have in common with a niche Calgary-based business? Sure, VoodooPC is a world leader in highly personalized, one-of-a-kind performance computers — systems that cost, on average, over $5,000. How does that fit with HP’s commodity-style production model? 

According to Ravi Sood, CMA, former co-owner of VoodooPC, it’s all about innovation.

“When you plug into a company like HP that was built on innovation, there are a lot of places you can go,” he says. He’s now the director of strategy and marketing for HP’s new global gaming business unit. His brother and VoodooPC founder Rahul is chief technologist for the unit.

“We plan to take the new gaming division into a unique direction — creating an innovation mindset that will hopefully go beyond our own tech shop,” explains Ravi. “We’re looking for people who have ideas and a will to make them happen. It’s an exciting new initiative, built on the VoodooPC business approach, and the R&D capabilities of HP.”

Finding a value proposition

Rahul Sood started building PCs for the local Calgary market back in 1991. Over the years, he veered into five or six businesses, including web design, software development and hardware, essentially creating a one-stop shop for computing needs.

“We were growing steadily and profitably,” says Ravi Sood, who joined his brother in his business initiatives in 2000. “We had exiting in mind by the time I joined, but there was no real value in the company. Sure, our revenue and sales were growing consistently, but there was really no value. There was nothing about the company that made it unique as a business model. So we had to figure out how to build business value.”

With that in mind, the brothers pared off all the commodity businesses and chose to focus on hardware because it was Rahul’s core competency, and that of a number of others in the company.

“On the external side, we could see that everyone was going cheaper with their PC models, so we thought we’d take the high road and aim for a very specific demographic,” says Ravi. Thus was the focus on gaming systems.

“We don’t necessarily end up selling our systems to gamers — just people who want the best of the best,” says Ravi. “But being accepted by the gamer community gives us credibility.”

And finding credibility in the computing industry isn’t easy when you’re based in Calgary. According to Sood, U.S. editors wouldn’t even consider reviewing VoodooPC’s systems because they were Canadian.

“Having a website presence and creating the right sort of packaging for the product were pretty straightforward, but building a brand that justified the cost of the systems was another thing,” notes Sood. “We had to win lots of awards, get that kind of attention.”

And, indeed, VoodooPC did win many awards — receiving top honours three years in a row in the Ultimate Gaming Machine competition put on by Computer Gaming World Magazine. There was tough competition from the company’s main niche competitors, Alienware and Falcon Northwest, but they put their mark on the market by coming through. 

“Executing the new business model was a challenge,” accepts Sood. “We had to change our blood and create new alignments — there was a big gap between where we were and where we wanted to be — but we had anchors in the business, innovators, and we knew we needed a cultural change to encourage them to go further. It was a fun ride but not an easy one.”

It took the Sood brothers about 24 months to turn the business around.

Getting the right tools

Ravi Sood is ambitious and clearly always has been. “My brother and I have had businesses together since we were teenagers,” he recalls. “But in my early twenties, my uncle told me to do a CMA because I knew nothing about business. He told me it would give me a way of looking at the world of business differently.”

He kept an open mind and soon found that what he was learning he could apply to the business he was doing.

“Lynn Sugden, CMA, who taught me at the CMA Boot Camp at Grant MacEwan College, had a big impact with me,” he recalls. “He was able to figure me out and took me under his wing for a month and a half. He taught me the fundamental tools that helped me look at any business intelligently — to look at where I am today, and where I wanted to be, and helped me crack the code of how to get from one to the other. The CMA taught me how to think big and gave me an appreciation for strategy. I took an MBA as well, and that gave me a better idea of strategic maneuvering. The two took me from having big dreams to having big plans.” 

R&D synergies

As ambitious as he is, Sood sees the VoodooPC purchase by HP as just another step towards something truly big.

“Back when we said we were going to be the top gaming brand in the world, we could see the sight line for making that happen but it still seemed like a crazy thing to say to a lot of people. Now, as we continue to redefine the gaming machine, we want to make our systems as influential as Apple. It may sound crazy but it’s possible. Think about it; there are lots of cool car companies out there, but there aren’t a lot of Apples in the world.”

After the HP buyout was announced, some suggested that VoodooPC was just looking for the best price after one of its main competitors, Alienware, was purchased by Dell. The truth, of course, is more complicated.

“We were approached by Dell originally,” notes Sood. “But we didn’t do that deal because Dell didn’t have a true R&D presence like HP did. To go to the next level, we needed some serious leverage and innovation capacity, while also maintaining the VoodooPC brand. It took a year for us to determine how we were going to structure the purchase.”

Of course, there are still a lot of questions that remain unanswered — where the two entities will meet in production, for instance.

“There’s a middle ground between the two, product-wise, and also an unknown, which we’re not ready to divulge quite yet,” says Sood. “We have a very strategic unit, reporting to the chief technology officer, and we’re fundamentally about innovation. Todd Bradley, the head of the personal systems group, is trying to incubate us, keep us as pristine as possible, so that we can influence HP. And we’re inviting innovators into our team, hoping that they’ll come to us directly to join our business.”

An open shop

Although Ravi Sood kept most of his business unit’s work under wraps during our interview, in April of this year, HP arranged a press event to show off a few prototypes, to give the public an idea of where the new gaming division was putting its energies. One device, Panoply, creates a seamless, curved display that fills the gamer’s field of vision, increasing the realism of play. The image, according to Rahul Sood, is created by “using a fast, automatic, camera-assisted calibration process that avoids the need for precise projector aiming.” Rahul sees it having potential uses as a remote collaboration tool and scientific tool, as well as the obvious gaming application.

At the same time, HP unveiled a new “super-projector” capable of high resolution and high brightness, and a handheld unit called Mscape that can lay multimedia digital experiences (text, audio and video) on a physical landscape, using GPS signals — essentially increasing the connectedness of mobile devices by making them responsive to the location in which they stand.

Each technology is a big leap, and an encouraging sign that the new HP gaming team could be launching some exciting new ideas in the fall — their first official launch.

But Ravi Sood sees their work as much more than a few particular products.

“I want to be clear about our strategy,” he insists. “We aren’t aiming to launch products as much as we want to launch a crusade — to immerse engineers and technicians in a new innovation mindset. We are looking for people with ideas who want to see them come to life. I think we can innovate much more effectively if we have an open business model, rather than an old-style, closed tech shop. What better way to engage with other innovators than by opening your doors?

“When we go live in the fall, there will be an interactive model on the website,” continues Sood. “We’re not going to have anything in stores but we’re going to draw people in with this model. I encourage people with ideas to contact me directly, any day. It’s through open innovation that we’ll make a difference. It isn’t one or two people that make this happen but a much broader community. We want to help build that community.”

Robert Colman is editor of CMA Management.

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