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Tejas’ Hot-Box Model

January 20th, 2005 · No Comments

Business Week’s blog has a post about Tejas raising $15 million in funding:

Before raising the round, Tejas, which was founded in 2000, had already sold products for four years, shipped three product lines, hired 160 employees, and signed global distribution agreements–all on $14 million in funding.

How did Tejas do it? Not just by using inexpensive labor. The company’s model relies on original equipment manufacturers (OEMs)–that is, big companies that slap their brand names on its products, sell them all over the world, and share the spoils with Tejas. The OEM partners sell mainly to customers in Asia, where demand for telecom equipment is stronger than in the U.S. This way, Tejas doesn’t have to build a costly worldwide sales and distribution network. However, the company sells directly to customers in its home market, India, where telecom carriers are rapidly expanding their networks.

Business Week calls this model Hot Box 2.0.

Tags: Management

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