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As it applies to the business world, Darwin’s concept of “survival of the fittest” finds its most perfect expression in California’s Silicon Valley. Riding the bleeding-edge of technology is the surest path to success, and only those companies that can recognize the trends and adapt quickly are able to outpace the slow, plodding dinosaurs that have only size and strength as their advantages. RGB Networks CEO and Chairman Jef Graham says the ability to adapt has helped the company get ahead of many industry giants and will continue to serve it well as the market continues to change.
“We have to come in with highly innovative products – ones that put us ahead of the larger, more established companies and pinpoint the needs of our target customers,” Graham says. “You succeed as a start-up when markets emerge very quickly and grow exponentially.”
RGB Networks concentrates on products that process video for service providers, such as cable operators and telecommunications companies. Its technology revolves around transcoding video into different formats on different devices and inserting targeted advertising content into video streams. Founded in 2003, RGB Networks’ technology has attracted the attention of investors, including Accel Partners, Comcast Ventures and Kleiner Perkins Caufield & Byers. “We’re very fortunate that we have the three top-tier investors in this category involved in the company,” Graham says.
Solutions such as the ones provided by RGB Networks have long been dominated by large-scale firms including Motorola and Cisco. However, RGB Networks has identified an opportunity to fill a need with new technology and take market share away from the giants – and it comes from the Internet.
Since the rise in digital technology, Graham says information increasingly has been moving from proprietary systems to Internet protocols (IP). First, data moved from hard copies and magnetic-based medium to the Internet. More recently, voice communication has migrated from telephone systems to voice-over-IP. Now, the most current move has been for video to be streamed over the Internet. The most prominent example of this has been the advent of streaming video services such as Netflix and Hulu that stream movies and TV shows to consumers. Graham says the clear benefits of IP video are that it is more standards-based, simpler to operate, cheaper to maintain and provides a better platform for innovation.
Where RGB Networks sees an opening in the market is in developing technology for what is calls “multiscreen” IP video, where Internet-based video can be viewed not only on computer screens, but also on Internet-enabled TVs (a.k.a. smart TVs or connected TVs), smartphones and tablets. Comcast subscribers, for example, have the option of watching live television on multiple platforms, including iPads, and this is where RGB Networks has tremendous opportunity on multiple fronts, from the initial processing to the insertion of ads, Graham says.
With television streaming to Internet-enabled devices – as opposed to simply over the air or through a coaxial cable – cable providers have the chance to do more than plug in ads based on geographic region. Graham says that with multiple people watching the same program on different devices, each one of them can see different ads based on their personal preferences and past behavior. “When you go to an IP device, you essentially change the rules, creating a better experience for the consumer and more revenue for the operator,” he says.
RGB Networks first recognized the trend toward multiscreen television viewing in 2010, but also recognized that it would not be able to add capacity organically fast enough to meet the demand in time. Therefore, Graham says, the company reached out to another start-up that did have the technology in place and acquired it.
“It’s all about speed in this game,” Graham says. “It’s all about being first.”
Keeping an open mind and being ready to react are important parts of Graham’s management style, he says. These have been helpful especially as the culture of Silicon Valley has changed due to an influx of engineers from China, India and Russia. “The corporate culture in start-ups has had to adapt to that massive multicultural change,” Graham says, adding that this involves placing greater emphasis on facilitating communication than technology firms were used to doing in the past.
A veteran of the technology sector for nearly 30 years, Graham says his primary focus as CEO is “crafting” the company and creating an environment that encourages diversity in terms of ideas and products. Diversity, Graham says, leads to stability because it gives RGB Networks more revenue streams from which to draw. “As I can achieve diversity, we become a more predictable company with strong potential for long-term success,” he says.