About 250 people attended SIPA’s sold out annual event titled, eBusiness Craze and Trends in the eMillennium, held on October 23^rd at the Santa Clara Marriott. Ravi Padaki, Annual Event Committee Chair and MC, gave a brief welcome speech. Rajesh Srivastava, President of SIPA outlined what SIPA does and added that discussions are underway to add some more SIGs like Film making, IT India and Networking. Punita Pandey, Director, Fund Raising group, introduced the various sponsors for the event. This was followed by a brief speech by Mark Horton, Manager for UPS who commented, "UPS firmly believes that our success is in supporting organizations like SIPA."

Ravi Padaki then introduced distinguished panel of speakers from the world of eBusiness Dr Pehong Chen, Chairman, President and CEO of BroadVision; Jennifer Scott Fonstad, Partner, Draper Fisher Juvertson and Emeric MCDonald, Director of Research and Portfolio Manager at Amerindo Investment Advisors.

Dr Chen spoke about the Top 10 Myths in eBusiness. He commented that he has been in business for a long time and faced many challenges and nuances. "The company needs to have a plan," but more importantly be able to "execute" or "make it happen," he added. He said the total Internet tsunami is amazing and exciting and for a long time "we have a lone, tiny voice in the wilderness."

Changes in the Internet space are taking place at a warp speed for two reasons according to Chen viz.: automation around ERP has stopped and the next Y2K problem is 1000 years away—so the question is what else to do?

Chen gave an interesting spin to the Late Chairman Mao’s Socialist preaching about "Let a thousand flowers bloom," from the famous"Little Red Book." Chen said that there is e-commerce everywhere. He gave an example of how his 4-year-old son wants his own dot com. "I did not realize how deep this was," was Chen’s observation.

Chen also gave the famous Tulipmania that gripped Holland in the 1600s and drove people crazy. This example has become the mantra for some skeptics of the Internet. But Chen’s point was that within a short span of 30-40 years the entire country was crazy about tulips.

Commenting on the debate between bricks and mortar vs. dot coms, he said that in both the spaces business operate based on greed or fear.

Internet traffic has been growing 10 fold every 100 days he said. While eBusiness is booming, often companies overlook the impact it has on customers. "The Hunter has now become the hunted," he said. He cautioned that customer is still the king and that time has become a rare commodity. He illustrated this with an example of how many hours there are in a person’s life—about 700K (assuming you live until 80 years) when you are born out of which 150K is spent on work and the rest is on sleep and play. It takes 3 minutes to reboot Windows 95; 36 months on average to implement SAP/R3 and the average tenure of a CIO is 14 months. The next generation for eBusiness is to cater towards saving time. Personalization is the key to the new eBusiness and that is about understanding the self-service customers.

Chen then spoke about his own company and how they have managed to grow rapidly in a few years. Broadvision allows to personalize relationship among different constituents’ example customer, business etc he said. Currently they have about 330 customers.

Sometimes at the end of the day entrepreneurs forget about the customer. Who is going to use the product and why, what is the business model, what are the barriers to entry and how do you win are some of the key questions that should be borne in mind when starting a company according to Jennifer Fonstad, Partner, Draper Fisher Juvertson (DFJ). She pointed out that DJF was the first VC company to invest in the Internet in 1994 and that they have about $1billion under management and is the "best keritsu in the Internet business."

"Have seen every acronym that is out there," she commented. She said they receive about 10 to 15k plans every year.

Fonstad spoke about building a business in the eMillennium. Fonstad’s Venture Capital firm has seen wildly successful IPO’s for GOTO, Netzero, Tumbleweed and Kana among others.

According to her, about $7.7 billion was invested in start-ups in the second quarter of 1999, about 1000 start-ups were funded in 3 months and 200 IPOs are scheduled in October which breaks down to 20 IPOs per day. These staggering figures clearly underscore that there is plenty of opportunity and money to be made.

She cited the example of Hotmail, Netzero and other start-ups and how they focussed on their customers and markets and what is fundamentally going to drive the business. For Hotmail the important difference were the new features (the tag line at the end of the email) and new price. Netzero does not own any of the infrastructure and yet managed to launch their business nationally. She pointed out that for Kana the most important feature was building the team. "The problem today is not money but the scarce resource of people. The new problem in the new millennium is finding good people," according to Fonstad.

She said that exception is the most important thing for a business. Once you get the concept, raise the money, prototype, then beta, you have 15-25 employees, raise more money etc etc. "Valuation is a function of how successfully you have executed your business," she said.

Funding in the new millennium will be through friends and family, angels, VCs and banks. She commented that VC money maybe more expensive and that banks have also started to lend money to start-ups.

The event was re-convened after a tea-break for 15 minutes. Pran Kurup, Chairman, SIPA introduced the Annual Event Committee volunteers of SIPA who made the event possible and were a given a round of applause by the audience. He then spoke on how volunteers have been a part of SIPA from the beginning and will be in the future. If anyone is interested in volunteering for SIPA, please send email to [email protected].

Vivek Kumar, co-ordinator for the VC SIG announced that VC one-on-one will be held in early January 2000.

"This is the center of the Universe," said Pavan Nigam, co-founder and Chief Technology Officer of Healtheon. The Internet has been the largest creator of wealth in the history of the world Nigam added. "(But) most of the Internet-era wealth creation is still ahead of us," he said.

Nigam focussed on the Internet and how it changed his life. Before Netscape changed the digital landscape, Nigam was part of an exciting project on Interactive TV at SGI. He said, "ITV was a cool thing then but then in Spring 1994 Clark decided to drop the ITV concept." ITV was Jim Clark’s idea.

He shared some of the important lessons he learnt in the process of building and establishing Healtheon, which is considered as a pioneer in the Healthcare sector. The basic idea of establishing Healtheon was to connect everybody in the fragmented health-care industry and "make some money," Nigam said. And there was lots of money to be made in the $1.2 trillion health-care sector.

"Initially we met with limited success since we were ahead of their times," Nigam said. "Our initial euphoria led to despair," he added. "We realized our story was complicated. We changed our elevator pitch and made it simple. We will take care of your healthcare needs," was the new story of the fledgling start-up. You have to constantly evaluate the business plans and this is a fundamental point to remember in establishing a successful start-up Nigam pointed out. A secondary principal is that "simple ideas have a better shot at winning than complex ones."

Every start-up eventually dreams of making an Initial Public Offering (IPO) in Wall Street and Healtheon’s first attempt to go IPO in August 1998 was unsuccessful. "The market had dried up," Nigam pointed out and once again this led to despair. "The real test of leadership is during the down time," and every start-up will have a bad phase Nigam added. And in February 1999 Healtheon had a very successful IPO and was considered one of the best in Wall Street.

Staying focussed and communicating clearly and constantly with the team are some of the other important factors crucial for any start-up. Above all, a true Internet company’s growth has to be tied to Internet growth Nigam noted.

He commented that branding was very critical to any company. Rely on your instincts he pointed out. Eventually the fundamental will matter he said. Revenues, profits, execution, execution, execution.

He strongly recommended giving equity to the employees. What is the problem if the pie keeps getting bigger he questioned?

"The impact of the industry (Internet) has been transformational and reshaped the economy," noted Emeric McDonald who focussed on investing and the outlook for the new Internet Economy. He pointed out that new markets are emerging that did not exist before and cited the example of eBay, the online auction company. He said about billion computers will be connected to the Internet and trillions of dollars will be made since there will be an explosion of spending to adopt Internet solutions.

He commented that finally Wall Street got the "whole notion of technology." He pointed out that Warren Buffett of Berkshire Hathaway has resisted tech stocks and consequently it has been lagging behind in the past 5 years.

He pointed out that new middlemen have emerged in the Internet economy. The Internet lowers the cost of transaction and the result is that there is an explosion of new transaction. Examples include information consumption like stock prices, weather, maps etc.

The eCommerce explosion will result in better customer service according to McDonald.

Like Fonstad and Dr Chen, McDonald too emphasized the importance of the customer and said there will be fundamental shift in power from suppliers to consumers in the eCommerce space. "This is a consumer focus rather than supply-focus economy," he said.

There was a question and answer session after this and most of the questions were directed to Fonstad since they pertained to raising money and signing NDAs. One of the questions asked was what were the parameters that a VC company looks for in a start-up. Fonstad replied that "we are looking for big opportunity about $1 Billion market value. VC Money is expensive."

One of the questions related to taking offshore development in India. Nigam commented that Healtheon has already tapped into that and has an office in Hyderabad." We have about 75-80 people and are expecting 200 engineers there by next year," he added.

Dr Chen said that they use Indian consultants for their professional services and commented that India is doing a great service to the IT sector.

Raman Dakishanmurthy, Vice President of SIPA, gave a vote of thanks at the end of the session.

The event was co-sponsored by UPS, ONSET Ventures, Fenwick and West, Aspire Systems, Micromatics and TixToGo and supported by the Software Development Forum, Chinese Software Professionals Association and the Forum for Women Entrepreneurs.

For more information visit www.sipa.org