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Role of Engineering Execs. in an IPO
process 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!!
Business Operational Costs 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.
Career Choices for High Tech
Professionals
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:
Working as an Intrapreneur
On being an entrepreneur/joining a startup
But one should take calculated risks...
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.). Workshop on Seven Habits of
Highly Effective People Thanks to Kiran Kumar for the minutes 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.
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. 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. Corporate Strategic Planning and Alignment 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. General Announcements
Challenges of University Education in India 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.
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.
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 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.
Riding the Internet Wave: 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.
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.
SIPA Annual Event 1998
A panel discussion by: Anu Shukla,
Founder & CEO, Rubric Inc.
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. 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. |
Copyright 1995-1997 SIPA
All rights reserved.
[email protected]
Saturday, 28th February, 1998 