August 09, 2020
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Valley Of Fortune

Young Indian millionaires bloom like wild flowers, dotting the lists of top fortune-makers and propelling the industry on its growth spiral

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Valley Of Fortune

IT'S almost as if a million-dollar script is encrypted into the Indian genetic code. For, it's not isolated entrepreneurial streaks—rather, we have hordes of arrivistes, their at times modest credentials offset by that uncanny Indian nose for business. All pushing into key nodal positions on the Silicon Valley's hyperactive circuitboard.

Take the figures for April '97. Samir Arora of NetObjects—listed by Fortune as one of the top 25 'cool' firms in the US—hit the headlines when IBM bought a majority share in his company. On April 22, Hatim Tyabji's VeriFone was bought by Hewlett Packard for $1.3 billion. The number of Indian-owned firms which make over $50 million a year is remarkable. Zarina Kaji's Computer Biz made $74 million in 1996, Naren Gupta's Integrated Systems was at $84 million, and Suhas Patil, founder and CEO of Cirrus Logic, hit $1.15 billion.

Also to be mentioned in the same breathless litany, the launch of the year: K-6, a faster, cheaper chip to power your PCs, from Advanced Micro Devices Inc (AMD). The brains behind K-6: former Intel man Vinod Dham, the hardware savant who invented the microchip and changed the face of the modern computer. His is the quintessential Indian immigrant success story that proves that all the highjinks of the growth industry have more to do with individual brilliance than institutional backup.

There are others: Sanjiv Sidhu, CEO i2 Technologies, Vivek Rana-dive, CEOTIBCO . And the trailblazers—Vinod Khosla, founder Sun Microsystems; Prabhu Goel, founder Gateway Systems; and Umang Gupta, founder Gupta Corporation. The combined total worth of these big guns is a mind-boggling billions of dollars. Sanjiv Sidhu alone, for instance, was listed in the 1996 Forbes millionaires listing at $400 million, Vivek Ranadive sold his company to Reuters for $300 million.... The concentration of Indian business magnates in Silicon Valley is so high you could hardly run into an Indian here who, if not already at the top end of a company, does not aspire to get there soon.

Dham, in many ways, is the epitome. The Delhi College of Engineering graduate—whose brother had once predicted his love for physics would lead him to "sell bananas on the road"—headed the Intel Corporation teams that created the two industry-standard chips—the 486 microprocessor, and then the Pentium chip, the largest selling chip in histor y. "It was one of the big developments of the century," says Dham. Since then, both chips have been instrumental in maintaining a near-monopoly for Intel in the hardware market, comparable to Microsoft's domination in software.

That may now change with the latest in Dham's oeuvre—K-6, "the fastest X86 chip in the world, our weapon to take over the ball-game here", as Dham says. K-6 promises more speed than the Pentium and the Pentium Pro at a price 25 per cent lower. Also, to upgrade leader—Intel has already announced price cuts on its chips.

When Dham left Intel in late '95, after an eventful 16-year partnership, he joined NexGen, a startup headed by Pak-born Atiq Raza which had little money, no cash flow, no strategies. While K-6 was at the test-tube stage, the $21 million company ran out of funds. AMD stepped in, putting up $630 million for shares, sending its own stock plunging. The biggest asset that changed hands, of course, was Dham. And sure enough, a year later prices are soaring, and AMD boss Jerry Sanders is counting the kudos.

THE way to success was paved through the '70s and '80s by several Indians, who opened the floodgates for other ambitious Indian programmers and engineers. For instance, Prabhu Goel who made his mark with his Standard Verilog-XL, used in electronic chips. He sold his firm Gateway Systems to Cadence for $80 million and retired at 40. He then proceeded to construct his dream house for $5 million. He now invests in upcoming ventures.

Adaptation, learning to function in the American system, was crucial. Says Umang Gupta, who achieved his dream of making a profitable company, going public, and then retiring as the mix of shareholders changed: "The typical Indian approach is to build a business to leave for your children and grandchildren. In Silicon Valley, companies tend to get a life of their own—they get investors, go public and then get a personality that doesn't just reflect their founder but is more broad-based."

Everyone is susceptible to the Silicon Valley Itch. Zarina Kaji finished her training in nursing, and was home with her newborn child when the idea of starting a business selling computer-related products came up. With an initial $1,500 and with no idea about the field, she set up a company in her house. In 1996, Computer Biz, which focuses on network consulting, made $74 million. After 15 years in business, she says: "There are very few businesses where things happen by themselves. You have to make it happen."

Venture capitalists say the largest number of business proposals piling up on their desks are from Indians. All else being equal, Indians are also considered safe bets. "It's well recognised in the community that Indians make good entrepreneurs," says Prabhu Goel. California provided the homebase. Says Satjiv Chahil, who made his way through the '70s at Apple Computer and till early this year was vice president, worldwide marketing: "Silicon Valley was more of an even playing field because it really just started in the '70s. The entrepreneurs were from the '60s and '70s—the flower children—and were much more open-minded. They didn't have so much of the racial biases that would keep Indians down." Since his resignation, he too plans on becoming a CEO—of his own company.

"Never has there been such a renaissance in the 20th century," says Yogen Dalal, a partner at Mayfield, one of the top US venture

capital firms. "When I came here in the '70s, Sunnyvale and Cupertino were still orchards. They were rural. Over the years, they've become the centre of the peninsula. Very soon the Greater Bay area will become the New York of the Pacific Rim, the focus will shift from New York to California because of the entertainment and the technology. The Valley has become the centre of thought." And the Indians were right up there, making the boom happen.

Explains Kanwal Rekhi, founder of Excelan, and president of TIE (The IndUS Entrepreneurs): "We don't have the strength of numbers here, so we make our mark by way of wealth. And here it doesn't come from inheritance." The numbers are small—about 100,000 Indians live in the San Francisco Bay area, out of a total population of six million. But they're disproportionately large in influence.

And, the Indian network is strong and thriving. Aided by TIE, SIPA (Silicon Valley Indian Professionals Association) and the Indian Women's Business Association, which help young people. But there are also groups and subgroups, in which the Indians hang out and help themselves. All these, so far, rid of petty politics. Says Rekhi: "Economics unites you. If you do something based on economics and entrepreneurship, you're bound to move forward. There's no regionalism and religion here. Intellectual honesty is the basis." The results are visible. Havani Kola raised a million dollars for Media Kola, her Internet startup, to build and manage information access applications. The Indian network and people she met through TIE helped her greatly. "The mentor relationship can help a firm survive and avoid drastic mistakes. I called many CEOs when I faced a dilemma, many were generous with their time," she says.

And so, the young bloom like wild flowers. Vinod Khosla was just 26 when he started Sun Microsystems. Another 26-year-old who showed the entrepreneurial spark is Sabeer Bhatia, CEO of Hotmail, the world's first free e-mail service: "I know I couldn't have achieved what I did anywhere else in the world. Here people don't count your years before giving you money," he says.

HUNDREDS of others have been clawing up the corporate ladder. When Nimish Mehta joined Oracle Corp almost 10 years back, Oracle made $116,000, and had 500 employees. He's now it's highest-ranking Indian. The company is worth $6 billion with over 35,000 employees. He almost makes it sound easy: "Some Indians perceive a glass ceiling. The fact is, it exists in your mind. It's a different culture and you have to adapt. If an American came to India to work, he too would have to adapt, or face glass ceilings." Yet, there are only a few Indians at the director level, 10 to 20 at the vice-president level, thousands at the entry level. "It's not to do with Oracle. It's an approach that says I won't be able to make it. That I'm not that good. I would love to see Indians exhibit the willingness to go ahead," says Mehta. But Radhakrishna Hari, a programmer with the PL/SQL Development group, sees advantages in staying on the technical side. "You can earn as much as a manager, and you don't have to deal with the day-to-day nonsense," he says.

Over the years, Oracle has made concessions for Indians working there—each Thursday the cafeteria turns out Indian food, and at a couple of hundred Indians can be reached. The listings, which discuss visa-related matters at length, also include data on Bay area movies, Indian concerts and such like. At Oracle, like most other big firms in the area, getting visas and green cards is not a big issue. The employee handbook simply provides guidelines for managers on handling the paperwork. "This is Silicon Valley," says Ankesh Kumar, CEO of AT Systems. "They know if they start harassing you, you'll just go somewhere else. Finding good people here is hard." His firm does just that—finding the right people for the right jobs, and has tripled its marketshare within three years. "I'll never lose sleep over the fact that I might never have business," says Ravi Sastri, president, SIRA Technology Solutions Inc. "In a sense we've monopolised the software industry in America. We've found this huge network of desi companies working together, I would say in harmony. Though we sometimes step on each other's toes and a lot of crooked things happen, by and large Indian firms do business with each other. " Sastri's firm, started last year, has grossed over $4 million with 30 consultants billing for the year.

The really big players in the field, though, are firms like Mastech, grossing $123 million in 1996. Started by two dynamic young men, Sunil Wadhwani and Ashok Trivedi, it has been growing by 20 per cent every year. They recently went public, and now as CEO Wadhwani says, they have "ambitious plans", including taking over newer firms. And intend to keep up their position in Inc. Magazine's ranking of the 500 fastest growing US firms—they've been listed four times in the last five years.

But Mastech is based in Pittsburgh, Pennsylvania, a fair distance from many of its markets. "It's a handicap not being in Silicon Valley," admits Wadhwani. "For, the biggest challenge for a firm like ours is finding top quality managers." Many of Mastech's employees are Indian. "The only time US firms aren't open to Indians is if the job needs a lot of user interaction and the Indian has a thick accent," says Kajaal Narain, who runs Stratascope, a bodyshopping outfit. "Otherwise, Indians have a good reputation—hardworking, eager, enthusiastic and don't waste too much time socialising."

The scale of pay for newcomers? Minimum offer for someone toting a Bachelor's degree is $38,000 per year, or you can't get an H-1 work permit approval. "About 65,000 H-1 visas are granted a year," says immigration lawyer Donald Frieberg who handles large numbers of Indian clients. "That's the quota worldwide. But they keep trying to cut this down saying it hurts the US workforce. In fact, there's a shortage of trained professionals."

It's more the stocks than salaries that's the incentive for the long hours people keep. Sandeep Deshmukh, a programmer at Infor-mix observes: "Everyone is extremely competitive trying to make big money. It's just like Bombay. And most of us spend at least an hour a day checking out stocks on the web."

 Hi-tech consulting is another area of Indian success—membership to the exclusive Big 6 firms is now within reach of many Indians. "Consulting is the wave of the future," says Ram Mohan, partner at KPMG Peat Marwick. "If you master consulting, you can do anything. It is an advantage to be an Indian as you can bring a non-White perspective to the board level." he says. Like many other IIT-ians in the US, Ram keeps in touch with his college buddies. Over the last 20 years, they vacation together—dog sledding in Alaska or a safari in Africa. But, mostly their success and money go into spinning more success and more money. Says Bakul Joshi, CEO, Multiple Access: "Once you make it, you keep working at it all your life."

There's a lot of charity too. "Once you've made the money, you realise you have to start giving it back to the community," says Yogen Dalal. Umang Gupta gave a million dollars to set up a home for handicapped children, Prabhu Goel funds an educational institution in India. "We also give back with TIE," says Kanwal Rekhi. "By encouraging younger people to come up. Time is money too." As Umang Gupta says: "You should live for the passion to do something." "It's the spirit here that you can only move forward," says Vinita Gupta who led Digital Links to spiralling growth. "Silicon Valley is special because immigrants bring a special mix to this place."

Vinod Dham

Created history's largest selling chip, the Pentium, and its predecessor, the 486. Also developed the K-6, main rival to the Pentium Pro.
On success:
I feel very fulfilled, both professionally and financially. I'm searching for what I want to do next, not necessarily in electronics.
On Silicon Valley:
It's a crazy place. You can easily work 25 hours a day. You have to learn how to do it; no one will teach you. I always steal time to be with the family, to go back for dinner with them at seven.

Vinita Gupta

CEO, Digital Links
1996 revenues: $58 million
Motto: I never do anything I don't feel good about. So, I hold myself to high integrity standards. And I wouldn't compromise that for anything. I think people appreciate honesty.
Secrets of success: It's just persistence and the desire to succeed.

Kanwal Rekhi

On the boards of Novell and Rexon, formerly vice president and chief technology officer, Novell. Founder, president, CEO, Excelan. 
Net Worth:
An estimated $25 million 
Intellectual honesty, smart work, be genuine and learn to share the territory. You cannot be petty and focus on nonproductive issues. You have to be a leader. A sense of fair play and of shared destiny has to be there.
 Secret of Success: Luck. You have to be in the right place in the right time. It always takes hard work, but you need the right break.
 On Money:
In the US you create wealth and it distributes itself. In India the politics is to share poverty rather than wealth.

Yogen Dalal

Partner, Mayfield (one of the 10 biggest venture capital firms with a corpus of $800 million for investment) Business Philosophy: The Valley is constant change and you have to thrive with the change. I like the entrepreneurs I work with to be ahead of the market. You have to understand who the customer is. Just building a better mousetrap isn't enough. 
Secret of Success:
Being at the right place at the right time. More than that, having a passion for a particular area. My IIT paper was communication technology. Most people forget that success is mostly hard work. It is also luck, and having good mentors—hooking up with them and understanding that as a foreigner you can work hard, but some doors really get opened by people. Coming to Stanford was really the lucky draw for me.

mang Gupta

Founder and CEO Gupta Corporation, from 1984 till 1995 when it was renamed Centura Software. Earlier, vice president and general manager of the micro-computer products division at Oracle. 
Net Worth:
Tens of millions 
Secret of Success
: Ambition, passion and always hard work. You have to be reasonably bright—most people can do it.
On Success:
It's relative to your plans. When my firm had a successful public offering, worth $400 million on NASDAQ at one time, I felt I'd achieved success. From then on, having made money, established credibility, I've been asking myself what success is.

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