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Interview with Craig Malloy, CEO of LifeSize

As part of our efforts to cover the Texas high technology market, we've started to a new question and answer section where we will be talking with local executives, entrepreneurs, and venture capitalists about their companies. To kick off our first interview, we caught up with Craig Malloy is CEO of Austin's LifeSize (www.lifesize.com), a company which develops high definition, video conferencing systems.

Craig, thanks for the interview. For those who aren't familiar with LifeSize, tell us a bit about your video conferencing systems?

Craig Malloy: LifeSize pioneered high definition video conferencing. We began shipping the industry's first HD conferencing systems last year and we currently have thousands of systems installed across a variety of vertical applications, including finance, education, medical, and entertainment, to name a few. Our products are plug-and-play, and easily integrate with any IP network. One of our key selling points is that our technology delivers superior quality over any bandwidth. The customer doesn't need expensive, dedicated networks to get the full benefit of our technology. We can deliver stunning HD video over a 1Mbps connection across the public internet, and the experience is comparable to much more expensive telepresence systems. When you think that customers can buy our systems for as little as $8,000, it's pretty amazing. We refer to this as the "democratization of HD video."

What's the story behind the company--why did you decide to found LifeSize, and what opportunity did you see in the market?

Craig Malloy: Four years ago, my partner and I were frustrated by the fact that traditional video conferencing had never really lived up to its promise. The systems being produced by the established vendors had become a "technology of last resort" since both the video quality and reliability were so poor. In addition, these systems were very complicated to use, so people just didn't bother. We saw that the demand for high-quality visual communication was still there however, and that the technology would soon be in place to make widespread adoption of HD video conferencing a reality. Currently, we're in the midst of a "Perfect Storm" for HD video adoption. HD monitor prices are dropping rapidly, cheap, high-quality internet connections are readily available and standards have evolved like H.264 which will help in the market adoption of HD video. We're seeing a huge demand for our products.

Who are your typical customers, and where are you finding the most traction with your systems?

Craig Malloy: Our customers are organizations of all sizes spanning all types of customer applications. Any organization that has a need to collaborate with a remote site, whether it be an other company location, a customer or a partner, is a candidate for our technology. We're finding that in many cases, even within the same building, people will opt to connect with a colleague via LifeSize HD video rather than pick up the phone. Human beings are visual creatures. One interesting account is a casting agency in NYC who uses our system to audition talent in LA. It's cheaper and more efficient than coast-to-coast travel and the quality is so good, they feel as though the audition is not compromised in the least. And finally, many of our customers (in addition to saving money on travel) are finding that the use of our video conferencing systems is helping them implement their corporate environmental initiatives (i.e., reducing their carbon footprint).

How big is LifeSize now in terms of employees, and how many are here in Austin?

Craig Malloy: We currently have ~127 employees, with 80 based here in Austin.

Your firm seems to have been able to easily raise quite a substantial amount of venture capital from some great investors. Can you talk about why your firm was able to connect with those investors?

Craig Malloy: Our success in raising capital is a function of market opportunity, deep and specific market experience, proven execution and strategic partnerships.

There is an enormous opportunity in HD videoconferencing - all the pieces are in place for success. The quality is amazing, the experience is real, and we're doing it over the IP infrastructure that companies have in place. I've seen skeptics turn into champions after a demonstration. It's a transformative technology that can deliver real business benefits. So the market is growing like crazy, but it is a complex technology, so the barriers to entry are high.

But a good market and a good technology will get you only so far. We've attracted additional financing because we have put together a team with deep and specific market experience, which is essential to understanding the needs of our customers and how they buy and use our products.

This team has delivered amazing results. Investors have confidence in us because we have proven our ability to execute and deliver winning products. We have been shipping products for close to two years.

Finally, our investors have brought us more than money. They bring us strategic guidance and business connections that help take our business to the next level.

What has been the toughest part of growing your business, and what tips would you give other entrepreneurs on how you've been able to be successful?

Craig Malloy: The toughest part of any business is making sure you have the right people on the team, and to make sure they understand the fundamental vision for the company. Once you get the right people into place with a clear idea of what you want to achieve, things happen.