Events
Events

Events of 1998

Saturday, 28th February, 1998

Role of Engineering Execs. in an IPO process

A Talk by Subhash Tandon,
Sr. Director (Engineering),
Prism Solutions, Inc.

Our thanks to Ravi Gunturi for the minutes

The meeting was called to order around 3:10 p.m. Pran Kurup welcomed everybody to the first SIPA meeting of the year and briefly discussed the mission of SIPA. Then he announced the SIPA organizational changes and introduced the new executive committee.

Pran Kurup, SIPA's president '95-'97, will be stepping down. Rajesh Srivastava, who has been involved with the association for the past 4 years, will be the new president.

He then introduced the special interest group volunteers -- Vivek Kumar of the Venture Capital group, and Dhaval Shah of the Web Technology group.

Mr. Subhash Tandon, the speaker for this meeting, was introduced. Mr. Tandon is currently the Sr. Director (Engineering) at Prism Technology, Inc. He has over 22 years of software industry experience at large and small companies, last 19 of which have been here in the silicon valley. He has done a Masters in Physics (IIT/Kanpur), and an M.S. in Computer Engineering (Case Western Reserve University, Cleveland, Ohio - 1978). He worked in HP Labs (1978-91), and at Amdahl (1991-93) and contributed to the successful IPO of Unison Software (1994-96) before his current position as Sr. Director at Prism Solutions, Inc.

Mr. Tandon talked about the role of Engineering executives in an IPO process.

Role of an engineering manager

What is the role of an engineering manager? The roles vary from big to small companies. A big company trains you to be a leader -- one who gets things done through other people. The difference between a manager and a leader is that a manager knows the day to day details of his/her group.

There are 5 major roles of a manager:

- planning & organization (must be organized; must setup and lead meetings to facilitate things)

- communication - should be a good salesman and sell ideas

- management & development - must understand and be able to deal with people with very different styles

- technical skills - must be technically sound. It is difficult to command respect otherwise.

While working for a small company, a manager may have to unlearn many of things taught in leadership seminars and the like. The dynamics of a small company are quite different. Since things have to get done with very little infrastructure, everybody ends up working for everybody else -- the CEO essentially works for everybody !

Small company organization

The executive team in a small company is organized as follows: There is a CEO/founder. The VP's of Engineering, Marketing, Sales and the CFO (chief financial officer) occupy the second rung on this ladder. They are followed by the VP of Consulting, VP Business Unit & perhaps the VP for International Sales.

The engineering division of a small company is usually organized as follows: At the top of engineering is the VP of Engineering. He or she is followed by the directors of Development, QA (quality assurance), Tech Pubs, & the Architect for the product. Then come the directors for Customer Support and Technology Strategy. Sometimes, directors for QA and Tech Pubs don't exist -- the director for Development may man these positions. In such a scenario, the engineering exec. has the following roles.

- Vision & Strategy - The VPE is responsible to the investors & and the board. She will have to make presentations to the board & the investors. Usually, at least one of the board members will understand the technology upon which the startup is based. If not, they will hire a consultant to evaluate the technical strength of the startup.

- Accountability - the VPE is ultimately responsible and owns the product. She ultimately shoulders the blame for a defect in the product. No excuses can be made by her.

- Growth with the company

- Manager -- the exec. must also be a manager at times, recruiting employees, setting up beta sites for product testing etc.

If a CEO/founder of a company has a mature product, but cannot be a good VPE (Vice-President, Engr.) , a VPE should be brought from outside. A VPE is often looked upon to boost morale when things are down.

 

Stages of an Engineering Exec

The engineering exec. is mostly behind the scenes throughout the IPO process of a startup. His efforts are visible primarily through sales & marketing.

From inception to 1 yr. prior to IPO, the main task is to get a product out and keep improving its quality. About 6 to 12 months prior to IPO, product quality must be improved, and sales must be increased. Schedules must also become predictable during this phase. Good customer support is also a must.

About 3 to 6 months before the IPO, the VPE makes a technical presentation about the product & the organization in front of the financial community.

During the actual IPO, the VPE gets some press & visits from analysts.

In the post-IPO phase, the stock price & hence the morale, frequently go down. The VPE must deal with the low morale and be able to stabilize his organization by talking with people etc.

Small vs. Large companies

Mr. Tandon concluded his talk by differentiating a small company from a large one. A small company usually has minimal infrastructure, and sparse resources. Furthermore, there are usually no relationships between people since they haven't worked with one another, as is usually the case in larger companies.

A small company is fast paced -- there isn't much time to think through a problem fully before making decisions. Quick decision-making based on partial information is the norm. There is also substantial instability due to the uncertain future of the company.

A large company, on the other hand, is employee oriented. Employees are given ample opportunity to grow by taking classes focusing management, leadership and technical skills. A solid infrastructure exists and resources are readily available.

Q & A

A number of questions were asked throughout and at the end of Mr. Tandon's talk.

Q. What recruiting mechanism is effective in a small company

A. Westech/newspaper ads is not a good idea -- a small company is usually not visible enough to attract people via a newspaper ad. Onsite recruiters manage this process very well. Personal contacts help immensely.

Q. When is it right for a company to go public?

A. A company usually needs 4-6 consistent quarters (i.e., meeting expectations) before it can talk to the financial community.

Q. What is the value of a business degree to an engineering manager?

A. In hi-tech, not much... There are others in the company who require and possess the necessary business skills. Technical knowledge and management skills are the most important things an eng. manager should have. Some business know-how and marketing/financial jargon is useful while talking to the business community.

Q. How do you deal with employee turnover?

A. The main reason for leaving a company is better pay (elsewhere). Equity becomes a big motivator for people wanting to stay at a company. Recognizing a person for his/her contributions in the organization is also essential to lowering turnover. Someone from the crowd suggested hiring people on H-1, followed by an endless green card process!!



Saturday, 28th March, 1998

Business Operational Costs
A Talk by Parkash Ahuja,
Sr. Vice President
Charles Schwab & Co. .

Our thanks to Kiran Kumar for the minutes

Parkash has been Sr. VP at Charles Schwab since 1995 where he oversees the corporate administrative functions and Purchasing. Prior to this he was Vice President at Sprint. He has held various other senior management positions at Sun Microsystems and McKinsey & Co. An architect in his early career, Prakash received his Bachelor's degree in Architecture from Punjab University in 1972. He also has an MBA and an MS in Engineering degrees from the University of Michigan, Ann Arbor.Prakash is the founding President of Silicon Valley Chapter of International Facilities Management Association. He is also on the Board of the International Development Research Council.

Mr. Ahuja focused his talk on challenges in the business environment for the future. Some of the issues any business must consider in its roadmap for growth are the following :

- That its success depends on its ability to attract and retain skilled manpower.

- That technology affects the nature of the work, the worker and the workplace.

- That in the course of busines growth, the core vision and values must remain intact. Entrepeneurs must realize that, in the course of typical cycles of any business, it is critical that their values and vision do not falter.

Most businesses, operate in a global environment and face challenges that cross traditional boundaries of experience. Mr. Ahuja cited the impact of the Asian crisis on the global market.

The bottom-line in any business venture is very simple: Overheads and expenses are to be kept as low as possible concurrent with achieving total customer satisfaction. This strategy is relevant to all businesses irrespective of size and should be the core philosophy of operation. But low costs and customer satisfaction cannot be easily reconciled since they tend to work against each other. Hence, implementing this principle requires an effort to achieve a fine balance between the opposing forces of costs and customer satisfaction. Technology is a handy tool to achieve just such a balance.

It is also very important for businesses to focus on future growth rather than present size. The basic idea is to take care of shareholder value which increases only if the business grows and returns spiral upwards.

Mr. Ahuja moved to the topic of changing work environments. The traditional business has focused on compensation and benefits. The new workplace will have to expand the old definitions of compensation to include modern conveniences such as 'flex-time' and telecommuting. Some companies provide in-house services for their employees that allow work and personal lives to converge. An example of such amenities might include in-house day-care, concierge services, portable medical insurance, 401(k) plans and IRAs etc. The basic premise is that it is in the best interests of the company to ensure the growth of the individual. The employee should feel comfortable in the workplace and the company should provide for their personal growth and development. The worker of the future might work in a virtual office wherein he/she moves from assignment to assignment on a contractual basis and gets together with different people on a temporary basis in the course of projects that keep changing in location.

The impact of technology is substantial. Today's definition of the worker is more knowledge-based as opposed to the conventional time-based definition. There has been a strong shift to intellectual work from the traditional manual labor.


Q & A

Q. What is the cost of losing an employee ?

A. Loss of an employee implies expenses in recruiting costs and a loss in the knowledge base and training and development that leaves with the employee.

Q. What are the hidden costs of any business?

A. There are administrative costs that can vary from 15% to 25% for small companies. The company must provide for future expansion which might require maintaining a larger office area than needed at the present. Smaller companies have to realize that they do not have the negotiating power of larger companies on supplier contracts and might suffer because of their inability to attract volume discounts. This factor becomes less of a concern with business growth.

Q. What is a 'cool' company ?

A. A 'cool' company is one that appeals to the younger generation. It might have innnovative cutting edge products e.g web publishing and be flexible in terms of work environment. It should be a part of the future and its method of operation must be something that the technologically-savvy generation can relate to.



Saturday, 25th April, 1998

Career Choices for High Tech Professionals
A Talk by Naren Bakshi,
Co-founder
Vision Software Tools, Inc. .

 

Thanks to Ravi Gunturi for the minutes

The meeting was called to order around 4:15 p.m. Rajesh Srivastava, President of SIPA, welcomed everybody to this month's meeting. Mr. Naren Bakshi, the speaker for the afternoon, was introduced.

Naren Bakshi co-founded Vision Software in 1991 and served as President, CEO and Chairman of the Board of Directors until December 1997. Mr. Bakshi brings more than 25 years of experience in strategic planning, consulting information systems management and business development to his position on the board.

Prior to establishing Image Innovation Solutions,Inc., Mr. Bakshi served as Director of Business Development at TRW Financial Systems. While at TRW, Mr. Bakshi was responsible for the company's entry into the document imaging systems market which resulted in $18 million in sales for the Division's first 12 months of operation. Mr. Bakshi also served as part of the TRW team that acquired Teknekron Financial Systems and earned the nomination for the 1990 TRW Chairman's Award of Innovation. During Mr. Bakshi's career in information systems, he also served as Vice President of Information Systems at Ameritrust.

Bank and worked in various management roles in systems and operations research at British Petroleum. Mr. Bakshi received a Master of Science in Industrial Engineering and a Master of Business Administration Finance and Marketing from the University of California Berkeley.

Mr. Bakshi spoke about career choices for hi-tech professionals today.

These are exciting times for information technology (IT) professionals since the information industry has never been as good as it is now. The Bay Area is the center of this growth in the information industry. Given this period of torrid growth, what are the choices? 

Consulting -- The first is consulting. Consulting can be done at all levels, from advising CEO's to being a software consultant. There is currently a shortage of consultants at every level -- IT professionals are in great demand, but there is also a shortage of management bandwidth in most corporations.

Corporate -- Big companies like HP generate billions of dollars worth of business which means that many good managers are required to oversee various sectors within the company.

Intrapreneurial -- Many companies now allow for autonomous units within a company to develop new and innovative technologies.

Entrepreneurial -- This involves inventing something new and starting your own company. 

In terms of financial success, Mr. Bakshi said it's not essential to start your own company to make money! Financial success is a matter of action and luck -- being in the right place at the right time. Who you choose to associate with makes a difference in terms of where you end up. View every action -- firings etc. -- as an opportunity to think about what you should do next.

With these thoughts, Mr. Bakshi gave some detailed advice on how to succeed in some of the above mentioned careers.

Working up the corporate ladder:

  • Work on a project that will make an impact within the company. You learn a lot more about the company and increase your visibility. Seek high leverage projects and take some risks
  • There is some degree of politics everywhere -- people are always trying to influence things in a good or bad way. Be aware of a person's motivation.
  • Communication -- selling or bragging -- is essential to success. One should be able to communicate her ideas. 

Working as an Intrapreneur

  • A lot of companies such as TRW, HP etc. are willing try out new technical ideas developed by employees within their companies. Many companies will now set up a unit within the company and provide resources to nurture these ideas.

On being an entrepreneur/joining a startup

  • Many want to get involved with a startup, but think it is a big risk. The only real risk is finding another job if the company goes under. It does not take very long to do that in the current market.
  • The key is being committed to the startup.
  • An entrepreneur/ founder must have a vision of doing something different demonstrate ability to innovate and lead be a risk taker. There is some risk involved in starting a company.

But one should take calculated risks... 

  • strike a balance between technology, market and customer driven goals
  • persist and adapt.

 

Mr. Bakshi then shared some of the lessons learned from starting his company, Vision Software , which automates multi-tier Java applications using business rules. 

In the early stages of the startup, the company may be financed by angel investors and friends willing to invest. While taking money from friends (for seed financing) make sure both of you have a clear understanding between each other. It may be worthwhile to write down the agreement on paper.

Look for opportunities to present your business plan. In Mr. Bakshi's case, he was able to present his business plan to the TIE organization and get financing. Look for value added money, i.e., money from investors who can advise and guide you as you build your startup. Share ideas with your board.

Be prepared for a course correction in the middle of the startup. The market changes from time to time and the focus of the startup may have to change with it. Although change is painful, a startup can reshape faster than a large corporation.

As a startup grows, people's role with the startup may change. A founder who was once the CEO/CTO etc. may have to relinquish his title and do whatever it takes to get the company off the ground. Don't get stuck to titles as the company grows.

Almost all startups have to get institutional financing eventually. This help test whether your company is "credible" or "big-league". Getting institutional financing means that you have to put the interests of the investors before your own. In this sense, the founder has to understand the tradeoff and relinquish control -- at some point, the company is not his anymore.

Mr. Bakshi concluded by saying that there are many options available to hi-tech professionals. One has to figure out one's goals (whether they are power, autonomy, wealth, fame, fun) and look for opportunities to achieve these goals. Entrepreneurs usually look for wealth, fame and fun rather than power and autonomy. Always sell yourself and take well-thought out risks.

 

Q & A

Q. How important is it to have a solid business plan?

You need a plan. The question is what are the components of a plan. You have to be able to say something about what you're doing. Then, you should be willing to share this idea and get feedback from people.

Spending money for marketing research reports is not a good idea. Research reports are good about telling you about the past and the present, not at predicting the future.

 

Q. You said commitment is important in a startup. If you start PT, working on weekends, when do you shift to full-time (FT)?

If you haven't reached a point where you can put your ideas in writing and get feedback from 5-7 people that you respect, it's not a good idea to quit your current job. Many experienced entrepreneurs are willing to hear your ideas in bay area. 

 

Q. How do you calculate the risk or competition for your startup? 

Collect as much information as you possibly can. No matter what you're doing, figure out the natural partners and competitors are. Sometimes, it's a good idea to join hands (sell-out) to larger companies. You can't be stubborn.

For example, Hotmail sold out to Microsoft, and made money for the founder and its investors.

 

Q. When you sell out, don't employees feel betrayed sometimes?

Part of the reason for a joining a startup is to make money; so most employees will likely be happy. It's important to realize that need to keep the investors' interests ahead of all others.

 

Q. How much information should an employee know in a startup; how do you make sure this information is not disclosed once employees know this?

If employees have "sensitive" questions, make sure they are answered either by talking to them yourself, or by bringing in board members or investors to talk to them about this (e.g., how much money do we have etc.).

Startups take 4-5 yrs to make it or break it and employees need to be committed all that time. So make sure you answer all their questions. 

The employment agreement regarding disclosure should be tough -- make sure he understands what he's not supposed to disclose (perhaps by bringing in legal advisors to talk to employees etc.).

 

Saturday, 27th June, 1998

Workshop on Seven Habits of Highly Effective People
A Talk by
Dr. Bhasker Biswas
VP Human Resources BioGenex
Mr. Dinesh Bajaj
Director of Sales VP Net
Dr. Krishan Kalra
CEO BioGenex

Thanks to Kiran Kumar for the minutes

Speaker Bios

Dinesh Bajaj is the Director of Sales at VP Net, a start-up company in the area of Internet Security. Dinesh has also held several management positions at Rolm/Seimens/IBM and ITT in telecommunications area. He holds a BSEE from IIT Delhi, MSEE from Ohio State University, Columbus and an MBA from University of Dayton, Ohio. Dinesh is also very active in the Indian community as well as social work in general.


Dr. Biswas is Vice President of Human Resources at BioGenex. Prior to BioGenex he was a Director in the Human Resource Advisory group and the Human Resource Advisory*s National Leader in the High Tech industry at Coopers & Lybrand, L.L.P., a global multibillion dollar professional services company. He has over twenty-five years of human resources management experience with various Fortune 500 companies including Control Data Corporation, Bechtel, Memorex, Maxtor and Hitachi Data Systems. At these companies he has held numerous positions including VP of Human Resources. He is also an adjunct lecturer of Human Resource Strategies at Santa Clara University Business School. Dr. Biswas received his M.B.A. from the University of Wisconsin, M.A. in personnel management from the Xavier Institute of Labor and Management Studies, and a Ph.D. in business administration from Golden Gate University in San Francisco.


Dr. Krishan Kalra co-founded BioGenex in 1981. He was the company's first President and continues to serve as its acting head of research and development. Prior to founding BioGenex, Dr. Kalra served for three years in a senior R&D position at Bio-Rad Laboratories, he also held product development responsibilities in the Diagnostic Division of Abbott Laboratories. Dr. Kalra received a Ph.D. in Chemistry from the University of Illinois and an M.S. in Physical Chemistry from the University of Rajasthan in Jaipur, India.


Minutes

The first speaker, Dr. Bhaskar Biswas, kicked off the seminar with a discussion on the benefits of adopting the 7 Habits. A true believer in these principles will achieve poise, self control and self confidence in addition to forming better relationships with people. Tertiary benefits include the ability to enhance a personÆs emotional life and the ability to motivate others. These benefits seem dramatic in scope, but it is critical to realize that the entire process of adopting the 7 Habits is more an evolutionary rather than a revolutionary process. There are no quick-fixes.
Some essential concepts to aid the process of learning the 7 Habits are an understanding of the following : ( i ) paradigms : We need to practice thinking out of the box . Our attitude and behavior is affected not by actual events but by our perception of what actually occurred. True problem solving will involve paradigm-shifts. (ii) A key to the effectiveness of any action is achieving a balance between Production Results and Production Capability. As an example, a successful company values the results of its operations as well as the state of its assets. Hence, it achieves growth by simultaneously enhancing the work-place atmosphere and focusing on the bottom-line. (iii) An emotional bank-account : Acts of courtesy, kindness and loyalty constitute deposits into this account whereas duplicity, pride and anger are considered withdrawals.

The three speakers Dr. Biswas, Dr. Kalra and Mr. Bajaj spoke at length on the 7 Habits as postulated by Stephen Covey in his book.

Habit 1 : Be Proactive This habit enforces personal responsibility. It runs counter to the theory of determinism, which states that events are generally determined by forces outside the individual's control. It requires that each person recognize that his future is in his hands and that he has the power to control his environment. Proactivity produces results whereas reactivity produces excuses.

Habit 2 : Begin With The End In Mind Here, it is suggested that the goals of the individual be clearly defined. This habit results in a clear definition of key roles, mission statements for projects, and critical activities. The Constitution adopted by the government of a nation is an example of this habit in action.

Habit 3 : Put First Things First By this statement, the author states that organization is the key to success. All tasks fall into different combinations of Urgent/ Not Urgent and Important/ Not Important categories. Of the four resulting categories, the focus should be on tasks that are important but not urgent since this class of activities and projects excludes crises, deadlines, interruptions and trivia but includes long-term goals such as planning, prevention and relationship building.

Habit 4 : Think Win / Win Most human interactions are Win / Lose as in academics, politics and sports. This attitude should be changed to Win / Win. A person should always recognize that he lives in an interdependent world and hence must act cooperatively. When solutions allow everyone to win, the world is a happier, more efficient place. In fact, any option other than Win / Win should be discarded as a æno dealÆ.

Habit 5 : Seek First To Understand Then To Be Understood This statement is a fairly well-known maxim. Simply put, the key to effective personal communication is good, empathetic listening with deep understanding. Any personal response should follow and not lead an act of listening. The listener must be willing to be influenced. To be understood clearly, it is important to be a good listener, get off your own soap-box and finally have the ability to make effective presentations.

Habit 6 : Synergize This habit embodies the concept that the whole is greater than the sum of its parts. Relationships that join people with different styles of thinking and abilities are opportunities for synergy. The essence of synergy is to value differences, build on strengths and compensate for weakness. Trust and chemistry are vital components of a synergistic relationship.

Habit 7 : Sharpen The Saw Here, the author indicates that small positive steps everyday lead to substantial overall benefits. The human self has physical, mental, spiritual and social/emotional dimensions. The greatest asset to develop, preserve and enhance is our own.

Saturday, 25th July, 1998

Corporate Strategic Planning and Alignment
A Talk by Satish Gupta,
Vice President
Cirrus Logic

Our thanks to Raman Dakshinamurthy for the minutes

Speaker Bios

Mr. Satish Gupta, is Vice President, Corporate Strategic Planning, at  Cirrus Logic. Prior to joining Cirrus Logic, he was the Vice President of Strategic Marketing and Development at Media Vision. The company was a leader in audio products and video compression technologies. Mr. Gupta also worked at IBM for 23 years in both technical and management roles.

Minutes

General Announcements
Vivek Kumar of SIPA's Venture Capital SIG made an announcement about the first event organized by the SIG. The event titled "Developing a Business Model and Dealing with VCs!" is scheduled for August 1st 1998 4 to 7 pm at the HP Oak room. www.sipa.org/events.htm.


Punita Pandey announced the 12th International Geeta conference to be held on August 8th and 9th at Stanford University. www.geetaconference.org


Strategy and Alignment
After emphasizing on having an interactive session instead of a lecture, Mr.Gupta began his talk by setting the stage with a few definition of terms.
a) Strategy
A business strategy is that set of dynamic integrated decisions which you must make in order to position your business in its complex environment
b) Strategic Alignment
Condition for effective deployment of interdependent resources or teams in a complex environment so as to achieve the strategic goals

In general a business consists of two sides : The Supply, and The Demand. In a company, The Engineering, Production ..etc work on the Supply side. The Marketing, Sales and Promotion groups work on creating Demand for the product, or getting information about the demand. In general it is harder create demand for a product. Demand for a product brings value to the company; this is the main reason why marketing gets more pay than engineering and not because one requires more skills than the other. In this context, making a career choice in Engineering vs. Marketing, should be based on where one's talents would be best applied.

To describe Strategy, Mr.Gupta quoted Stephen Covey's classification of tasks based on Importance and Urgency. A good strategy is one that helps a company stay in the famous quadrant of "Not Urgent but Important". When there is a good strategy in place, the key to success is "Alignment". Mr.Gupta cited the example of Intel. When Intel had to make a transition from being a memory company to a processor company, the management had made the right strategic decision in making the shift. However, only when Andy Grove moved all the best people in the company from a memory project and assigned them to processor project, did a real alignment take place in the company. Only when there is a alignment, empowering the individual will empower the team.

The best way to come up with a strategy is to have the people who do the work to come up with it. This way, the strategy works automatically and does not have to be sold to the employees. In order for a group of people to "Align" and come up with a strategy, they need to share a set of common values. In small companies, this entire process is shared by a small group of people, but in big companies this process is very difficult to achieve.

Alignment should not only occur within the company, but also with its external forces including Customers, Complimentors, and even
Competitors. Mr. Gupta cited the example of the relation between IBM and Intel, when IBM decided to compete with Intel, IBM lost the contract to build Intel's Pentium processors.   Similarly when the Pentium bug was discovered, the customers started blaming Intel instead of Compaq (or any other OEM). At this point Intel made the transition from being a OEM company to Consumer company. Situations such as these are "strategic inflection points" in a company. At such points the company needs to go back to the black board and re-evaluate its strategy for business.

Strategy Development Experience at Cirrus
Mr. Gupta used slides to describe the Cirrus Strategic Planning Process. The executives of the company come up with strategic guidance and define goals for the company. These goals should be well deliberated and in line with the core competency of the company. From here, each team in the company take up their aspect of these goals, and analyze it further. The goals should be looked at from market, technology, and any other selective functional perspectives. These analysis yields Business unit  strategies (such as products and product road maps), Functional strategies (such as Marketing, Sales), together with Executive Strategy for management. Then, the Business unit defines its goals and objectives, in terms of products, revenue, profits ..etc. This information can then be used to form a consolidated corporate strategy. After explaining various dynamics in forming a corporate strategy, Mr.Gupta emphasized that the key to have a good strategy is to have a good "Process". In his opinion, once there is a good process, even if you start with the wrong strategy, and work through the process, you will end up with the correct strategy for the company. A good process consists of a) Self-alignment, b) Communication, c) Accountability, and d) Integration

Question and Answers
1. Is there a place for "creativity" in strategic planning/alignment, how does one plan for it?
- This is part of the investment for future. any company needs to invest on "Phase 0" programs that will get implemented 2 to 3 years
down the road. Typically only half of Phase 0 programs become products and so the company needs to invest on twice the number of programs!

2. About transition from being an Engineer to Strategist
- The greatest block is the Engineer's expectation of accuracy, one needs to learn strategy from experience.
- When there are two great ideas, we should pick one and go with it instead of over analyzing it

3. How does one align with a Customer when the market place is being created, and the product idea is brand new?
- In this process, the company needs to go to the customer as early as possible, and solicit early feed back and get a sense of market requirements in this area.
- Align the goals of the product and the market place as early as possible.

4. In small companies, the value is normally Engineering, how does one communicate the value of strategy to Engineers?
- Send them to the customers ! people are normally very sharp and once the gap with customers is bridged, they begin to realize the value.

5. How often is a strategy revised/updated?
- Normally twice a year. The marketing brings information from the market and revise strategies together with the engineering. For example when Intel came out with "NAP", Cirrus analyzed it and decided not to pursue it further. However, Intel's MM. technology made a big impact on Cirrus' strategy.

6. Strategy needed for a startup
- Usually the startup environment should be very rich in ideas, opportunities and market. There should be plenty of good ideas for a startup to survive. If there are few ideas only, then they have to "overwhelming" in value.
- Preferably, you should not have to develop the market place, since it is a very expensive process and takes several years.
- There should be some "chaos" in the market place. If the market is steady and established players, then it is very hard to break in.
- The core competency of the company should be able to deliver in the market.
- A good analysis of Customers, and appropriate channels to reach the customer is very important.

7. How does one evaluate risk in long term strategy
- In long term strategies, numbers are usually vague. The revenue needs to be analyzed with respect to the investment
- Risk is always in the revenue not the investment (it is part of the expenditure)
- Accommodate for risk by investing in more projects
- Not to invest in products with marginal potential. Also, the product has to be a "no brainer"!

8. How do you make a transition from Engineering to Planning without a formal degree in management?
- Aggressively participate in cross functional teams
- Learn from opportunities and acquire a broader view

9. How does Intel's "Constructive confrontation" work ?
- This process does not work in every company. Intel has managed to establish a culture within their company that promotes constructive confrontation. Intel seems to have relatively high turnover rate in employees. Also, when they move out of Intel, they have to go through a re-training process to accommodate with the new teams

10. How does one come up to speed with a companies' strategy?
- The track record in the bay area for this is not very good. It is not easy to create a "durable" company. To achieve this, companies need to have a strong set of core values, and invest more in teaching them to employees.

11. Role of Strategic Consultants in companies
- In small to medium size companies they don't create much value. But in big companies they can be very important. Companies that grow at a high rate, usually looses its ability to direct it properly. From the example of Frank Casey in IBM who almost single handedly drove IBM into making PCs. Any market place analysis for PCs would have projected

- In startup companies, external consultants do not usually bring a great deal of value. This is usually because the knowledge of the market place lies inside the company within a core group of people. If it is not there, they need to go out and get it themselves. External consultants can only provide knowledge on the process of refining the companies strategy, and not the strategy itself.

12. What is a measure of a good strategist ?
- At any executive level, the skill level of people is generally very high and it is very hard to evaluate one's potential.
- In general one should have good communication skills, good track record, and have good credibility in the industry.

Saturday, 22nd August, 1998

Challenges of University Education in India
A Talk by Dr. P.T. Manoharan,
Vice Chancellor
Madras University
Our thanks to Kiran Kumar for the minutes

About the Speaker

Dr. Manoharan, Vice Chancellor, Madras University, has had an extensive career in Education. He has been a professor at several Universities including IIT Kanpur and IIT Madras. He has held several posts including Dean of Students at IIT Madras, founder of Regional Sophisticated Instrumentation Center (RSIC) at IIT Madras, and CSIR Emeritus Scientist.
Professor Manoharan's significant contributions to the world of academia include Designing a Master's Degree program for theoretical chemistry (reputed as the best program in the country) , developed courses on advanced Magnetic Resonance, and Spectroscopy techniques for Ph.D scholars. He has also published over 150 papers in international journals.
Dr. Manoharan has a B.S from Madhurai College, M.S from Madras University and Ph.Ds from IIT Kanpur and Colombia University in Chemistry.

Abstract

Indian Universities have produced several individuals of international repute. Several entrepreneurs, scientists, businessmen and other professionals of Indian origin in the U. S. had their basic education in Indian Universities. To continue to nurture and cultivate young minds, the challenges are not only intellectual but also administrative.
In the wake of India's economic liberalization, the global shortage of technical man power and the shortage of funds for modernization, how are the authorities dealing with these challenges? What lies ahead for these universities? In general, what are the challenges facing the administrators of today's Indian Universities? How can you help? What facilities are currently available, and what do the authorities hope to provide in the future?

Minutes

The Indian University system is in its 14th decade of existence. Today, there are nearly 230 universities in India serving a population of 20-30 million students. The university system encompasses Central Universities, State Universities, Private Universities and the relatively recent phenomenon of Open and Specialized Universities. The challenges of University education in India are primarily: - The need to answer the needs of society directly. There is a demand for visible output and measurable economic development as a product of university education. The challenge is to quantify the contribution of higher education to economic and social development to estimate if the goals of the university converge with those of society. - Universities are being asked to adapt to technologies affecting society. An example is the development of correspondence education. What is the impact of removing human interaction from university education? - There is also a challenge being posed to universities to restructure in the face of political and social conditions and varying stages of economic development.

The core of a university is the faculty and not the infrastructure. The ideal mix of faculty responsibilities is teaching (40%), research (40%) and consulting (20%).
The problems that plague the university system today are : (a) lack of thinking, motivated leadership and lack of dialogue (b) inability to cope with technology input (c) inability to handle market forces (d) lack of a pleasant working environment (e) no understanding of Total Quality Management (f) political interference and indecisiveness (g) absence of public understanding and participation (h) emergence of self-financing universities with fraudulent credentials.
There is a strong ray of hope even in this scenario. The openness in the economy, abundant opportunities and globalization has revitalized the student body. There have been no student union disruptions in the recent past and the entire student body has a strong desire to learn and gain skills of enduring value. The areas that are gaining are biology, biotechnology, information technology and business management. The losers are the basic sciences which is an unfortunate occurrence since technology exists only because of science.
As vice-chancellor of the University of Madras system, Dr. Manoharan is overseeing the following reforms : (a) delegating responsibilities to newly created Deans offices to streamline administration (b) starting correspondence courses (c) changing the fee structure (d) creating flexible degree programs to accommodate slow and fast learners (e) allowing registration for multiple degrees (f) adding infrastructure for research (g) computerizing administration and finance (h) developing a pleasant working environment (i) increasing focus on thrust areas and cutting unproductive programs (j) hiring young and dynamic faculty (k) increasing research productivity through consultancy.

The presentation by Dr. Manoharan was followed by a spirited discussion on one of the main reasons for his U.S visit : soliciting funds for Madras University development programs. The funding through the UGC for state universities is abysmally low. In addition, as per IMF and World Bank stipulations, higher education funding is labeled as a \021non-merit\022 subsidy \026i.e the benefits of higher education are deemed to be too long term for current investment which is instead being directed to quick yielding programs. The audience proposed fund-raising methods that included contacting the local Indian business community, creating a vibrant alumni association with computerized database tracking, collaborative projects with universities abroad, restructuring fees to generate revenue, presenting the benefits of investment in a quantifiable manner to attract investors and corporate sponsorship.

Saturday, 26nd September, 1998

Riding the Internet Wave:
The Story of Exodus Communications
A presentation by K.B. Chandrasekhar,
Co-founder
Exodus Communications, Inc.
Our thanks to Raman Dakshnamurthy for the minutes

About the Speaker

Mr.Chandrasekhar started with Wipro as a Customer Support Engineer. After working for Wipro in various positions including Marketing, Sales, and Support, he moved to U.S. in 1990. Working for Rolta India, he managed their US operations for two years. In 1992, he founded Fouress, a Network Solutions design company. In 1994 he founded Exodus. Exodus today has a market capitalization of $600 million and is a premier Internet Server hosting and Managed Services company.

Minutes

Mr. Chandrasekhar started out by giving an outline of his background. He was born in Chennai, and graduated from Univ. of Madras in 1983. After working for Wipro India, he came to this country in 1990. He was involved in placing people for 2 years, for Rolta.
When the contract expired, he had several options, but decided to start a company with $5000 in personal savings, out of his appartment in Cupertino. The initial product of the company was similar to PPP dial-up. However, when he found out the state/maturity of the PPP software with other companies this product was cancelled. Initial contracts for his company included interfacing CC:mail and the Internet.
Mr.Chandrasekhar was using a $19.95 per month dial up account from netcom for his business. He quickly realized the power of the internet and wanted to get into the business of providing content on the internet.
The first major challenge for his company was to gain credibility and the trust of customers since he did not have a background in internet business. Mr.Chandrasekhar says 'if you have done it before , it is not really a new business', and had to overcome this challenge. He pursued the dream of "Managing data systems for mission critical Information Systems". When he approached customers who did not have a back ground in internet business as well, they were happy to off load their 'difficult task' of managing the system to his company.
In Dec. 1995 Kanwal Rekhi, joined the company as an Angel investor and rescued the company from a financial crisis. The revenue for yr 1997 was 12.5 million and close to $60 million for 1998 - a 400% growth. Today Exodus has 8 data centers, and plans to have 18 centers by the end of next year. Transfer data rate between centers are in the range of 2Gbps, and store over 450 terrabytes of information. Total employees is around 350, and 50% of them are outside the bay area. Market capitalization is $600 million.
Exodus has expertise in 1.Server Hosting, 2.Internet Connectivity, and 3.Managed Services. All three of these are inter related as one leads to another. Speaking of market penetration, Mr.Chandrasekhar says that this is a very important aspect of a strart up, and one should address the right market segment, and choose the right customers. If he had approached customers who had the expertise of hosting servers, it would not have been possible to get the contracts. Another key aspect, he says, is to be a partner with the customers rather than an adversary.
Chandrasekhar's back ground was more in sales, and thus he played the role of an 'evangelist' in his company and hired good technical people to do the work. Exodus grew with lots of companies, including Hotmail. Today Exodus hosts over 400 servers for Hotmail.
Of the major Challenges faced by Exodus, Team Building, with the Culture was very crucial. The initial team that founded Exodus came in for the passion, and are still with the company even after IPO. Among the key tasks of running a startup, Chandrasekhar names a) Establishing Leadership, i.e., to set an example to other employees, b) Raising Funds, 'intelligent money' , i.e., investors who not only bring money , but also added value to the company with expertise in different aspects of the business, c) Managing growth, this involves, inculcating the company culture into the employees; as very important factors in a start up.
Of the Lessons learned from Exodus, Chandrasekhar said, being focused, hiring passionate people, being open in communication, leveraging the network, branding and leadership as key factors for success.
Finally, reflecting on his experiences with Exodus, Chandraksekhar says that it was a 'Very tough roller coaster', but fun. One should have 'fire in the belly' and full support of the family to go through the hectic schedule of 14 to 16 hour work days for 7 days a week. This can only be achieved if you make it a family goal rather than a personal goal. Last but not least you need a lot of Luck.

Questions and Answers

  1. Asked about holding 'positions' in the company versus having the skill for it .. for e.g. being the CEO and a founder.
    "One should be realistic about his capabilities, and what one can get from others." and you should be able to bring in the right management in order for the company to thrive.
  2. About the future business oppurtunities in internet.
    "Business is going back to a cycle similar to the 70s when there was a lot of terminals and the computing was shared. The Cable, DSL, speeds have made possible to have information on demand. Internet Security is going to redefine the way in which future transactions are done"
  3. What does it really take to be an entrepreneur ?
    "You had a certain 'escape velocity' that led you to leave India, and come to America and re-grow your roots here. You need a similar push to go to the next-level and succeed as an Entrepreneur"
  4. How to identify a good startup?
    "Pick a domain that is of interest to you, where your strengths will compliment the company's. Check out the idea, and have a chat with V.Cs and other executives. Go to the company around 8 p.m , the number of employees still working will give you an idea of the passion the employees have for the company"
  5. Where do you want to be in five years?
    "I hate to make predictions about the internet beacause it is not realistic to look beyond 6 months. But we want to be a Leader as a 'Network Centric' company."
  6. How did you get cusotmers for Exodus ?
    "We had a very strong sales team. The team has grown from 5 to 130 in strength. We hired good people for sales. 'If you pay peanuts, you get monkeys' "
  7. How to balance/negotiate equity when dealing with V.C.s ?
    "Dont worry about having majority equity, 5% of a big company is much better than 100% of nothing."
  8. How did you acquire the initial set of people ?
    "I was forutunate to meet the CFO and Director of MIS, when working with Radius during an initial contract. The rapport we established at that period turned out to be very good, and lead them to join Exodus. - In a way I was very lucky in this regard."
  9. Who is your inspiration ?
    "Sam Walton - Exodus used the 'same store' technique, and applied it to the high-tech area."
  10. How does one establish market barriers in start-ups ?
    "There are many barriers, including technical and marketing. Even though Barnes & Noble is a very big name in the Industry, Amazon was able to penetrate the online shopping market due to speed. Exodus has worked hard, and has gone through rapid growth, and gained credibility to stay in business. Financially, the initial $40M in pre-IPO funds, $70M from IPO and $200M in debts have given Exodus a strong position."
  11. How did you manage the growth of the company?
    "Adapt to business needs rather than business wishes. The 'Business plan' is a living document and never gets frozen. We had to setup data centers in areas where customers liked us to be. Boston, and New York based data centers were developed to satisfy customer needs. This involved a lot of people commuting back and forth between various data centers also. A few key founders had to move to the East coast to help grow the company there."
  12. What was the main focus of Exodus?
    "Customers. If you dont take care of your customers, someone else will!!"

Saturday, 24th October, 1998

SIPA Annual  Event 1998
Sponsored by ONSET Ventures


From idea to a successful business -
What is the missing link?

A panel discussion by:

Anu Shukla, Founder & CEO, Rubric Inc.
B.V. Jagadeesh, Co-founder & VP, Exodus Communications, Inc.
Murrali Rangarajan, President, Logistix Inc.
Supreet Manchanda, Senior Partner, KPMG

 

Our Thanks to Kiran Kumar for the minutes

Slides from the Annual Event 1998 available. Click here

The Silicon Valley Indian Professionals Association hosted its annual event for 1998 at the Sheraton Hotel in Milpitas, California on Saturday, October 24. The event featured an interactive panel discussion on the topic "From Idea to Successful Business - What is the Missing Link?" The entrepreneurs and industry leaders featured on the panel included Anu Shukla, founder and CEO of Rubric, B.V. Jagadeesh , co-founder and VP Engineering at Exodus Communications and Murrali Rangarajan, president of Logistix. Supreet Manchanda, senior partner at KPMG was a featured speaker but couldn't attend because of personal reasons.

The event was well attended despite the intermittent afternoon drizzle that brought back memories of El Nino. ONSET Ventures, a venture capital firm, was the official sponsor. The discussion was started by B.V.Jagadeesh, who walked the audience through the evolution of a business from conception of an idea to measurable success. He emphasized the fundamental importance of doing things right the first time. Getting the right team together, creating an effective business plan and ensuring that the operation has no loose ends is critical to success. One way of staying ahead of the pack is to understand market dynamics and adapt the product to differentiate it from the crowd. Customer feedback, he believes, is one of the keys to success in a market filled with aggressive competitors.

Murrali Rangarajan focused the discussion on how good customer relations are integral to successful businesses. In this discussion he represented both himself and Supreet Manchanda who had requested that his presentation be aired in-absentia. This part of the talk was tightly wrapped around customer focus. He stressed that it is vital to feel the pulse of the customer to know what the company vision should be. Customer support must be a highly evolved function throughout the alpha, beta and final production phases. Finally, there must be effective closure in the form of sales support to sustain the product through its lifetime. Key areas of customer experience are quality, flexibility, delivery, economy and information. Each sub-process in the company can be viewed as a customer-supplier relationship and a successful company is built by improving each link in the supply chain thus formed. A successful company is a synergy formed by its leadership, its process, the prevalent culture and the customer.

Anu Shukla capped the session with a concrete example of customer focus in action. She provided an insight into Enterprise Marketing Automation software applications that use the Internet to gauge customer loyalty and retention. It is now possible to use the Internet to create an in-depth profile of customer preferences and use that information to target specific groups and create an ongoing relationship that can be measured and used very efficiently. Marketing thus becomes an intelligent, ongoing process achieving higher customer satisfaction.

The evening concluded with a long question and answer session with the speakers emphasizing the importance of creating and maintaining the right team and keeping the customer paramount.


About the speakers:

Anu Shukla is the Founder and CEO of Rubric, Inc. She has leveraged her 15 years of high tech marketing experience to create the EMA ( Enterprise Marketing Automation) applications category. Prior to Rubric, she was VP of Marketing and Product Strategy at Vision Software and was Chief Operating Officer at mFactory, Inc. Ms. Shukla raised significant capital for mFactory and helped it make a successful transition from product development start-up to ongoing commercial concern. Ms. Shukla was Vice President of Worldwide Marketing and Product Management at Compuware/Uniface Corporation, where she successfully positioned the company and its application development tools for the enterprise marketplace. Uniface sales grew from $10M to over $85M during her five years there, and Ms. Shukla played a major role in Compuware's $433M acquisition of Uniface. She has also held senior management positions at Unify Corporation and California Micro Devices.

B. V. Jagadeesh is co-founder and Vice President, Engineering, at Exodus Communications and oversees the research and development of new products and services. He brings to this position more than fifteen years of network software design experience and an exceptional track record in project management.  In 1992, he co-founded Fouress Inc. with K.B. Chandrasekhar, Exodus Communication's current chairman. Within two years, Fouress, a network software design and development firm, had sales of one million dollars and was highly profitable. Seizing the opportunity in the Internet market, Jagadeesh and Chandrasekhar founded Exodus in 1994. Exodus merged with Fouress in February, 1995.

Jagadeesh has also served as technical project lead at Novell and 3COM.  He is a member of IEEE and served as chairman of the Engineer's Conference at Networld + Interop 1994-1995 which focused on networking technology issues. He holds a BSEE from Bangalore University, India, as well as a master's degree in computer science engineering from the University of Bombay, India.

Murrali Rangarajan is the President and Chief Operating Officer of Logistix.  He holds a BS degree in Mechanical Engineering from IIT Madras, a MS degree in Industrial Engineering from Arizona State University and an MBA in Marketing/Finance from UCLA.  Prior to joining Logistix, he served in a variety of senior manufacturing and product planning positions with Digital Equipment Corporation and with Ford Motor Company in Europe. He is a member of the International Who's Who of Professionals.

Logistix provides contract manufacturing, distribution and consulting services to high technology companies. The company has over ten sites and revenues in excess of $400 million. Its current market includes computer, medical and financial firms. One of the largest private companies in Silicon Valley, Logistix is a very fast growing company,   and has been on the Inc 500 Fastest Growing Companies five times, and on Silicon Valley's Fastest Growing Companies many times.

Supreet Manchanda is a Partner at KPMG and heads the group for Electronic Services and Supply Chain practices. He is currently on the board of three startup companies. He has over 16 years of industry experience with emphasis on Large Scale integration. Prior to joining KPMG, Supreet was CIO at Logistix Inc. He holds a degree in business from University of Houston and certificates in industrial management from University of Southern California and an executive certificate from MIT Sloan Graduate school.