• In Conversation

He hails from a middle-class Indian family but went on to the U.S. and made millions. The man behind Exodus Communications and Jamcracker, serial entrepreneur K.B.Chandrasekhar explains what it means to take risks and reap the rewards.

Entrepreneur (E): You’ve had a history of being a risk-taking serial entrepreneur. How has your journey been?
K.B.Chandrasekhar (KBC): In any entrepreneurship story there are always ups and downs. Unless you are willing to fail you will never know if you are pushing boundaries. And unless you push boundaries you are never going to make something that changes the world, or fundamentally what I call the next big step, that begins to happen in the process of human invention. This journey has been since my early days. When I was 16-years-old I used to play with the stock market at a time when no one understood what it really meant.

My parents were very supportive and thought I should take the risk and were also willing to risk their money. These were part of my early values and upbringing that have stayed with me always. I have put all my early learnings into practice in all my ventures. The journey has been all about finding something new with interesting twists and turns.

E: What has been your biggest learning from your entrepreneurial experience?
KBC: There are five important lessons actually. First, people are the key assets. When you are an entrepreneur, and not a big brand name, the kind of people you attract is the only factor that differentiates you from another company.

Second, be willing to fail because if you are not willing to fail, you will not be willing to take the risk that is required.

Third, communicate openly about problems and opportunities. My simple message to people has been enjoy the journey because when you reach the top the only thing is to come down. Fourth, balance family and work life.

Lastly, be unconventional in everything you do. There must be something that defines your personality, or what we call the mudra.

E: Everyone is talking about cloud computing these days. What potential do you see in it?
KBC: In 1994, when I started Exodus Communications, it was the first wave of cloud computing. We used to call it internet data centers and that was the first wave of cloud computing. The second wave was application service providers.

After that came software as a service on top of it. Then many of these components started maturing over a period of time. India and emerging nations are the biggest markets for cloud computing, though some of the analysts have not bought into the argument.

E: What is your vision for Jamcracker as its CEO and chairman?
KBC: Jamcracker has had a single vision from day one—how to enable frictionless delivery of a collection of IT services to target customers. Over a period of time, the phrase ‘cloud service broker’ has come into existence and Jamcracker is a pioneer in this area. It is able to act as a trusted broker that enables management delivery, aggregation and usage of a multitude of services, irrespective of the source they come from.

On demand services delivery simply means you will be able to consume it. In fact for over a decade people have been consuming on demand services, for instance when you use e-mail. You don’t even know where it is sitting, but you are able to use it on demand. That has basically evolved into cloud computing, which includes the most commonly used applications e-mail, collaboration and HR applications, compute as a service application [which means you can rent the computing capacity by the hour/day as you need it].

In short, the whole IT infrastructure which you thought you would need to build, you will be able to assemble with a product like Jamcracker.

E: Your comments on the Indian entrepreneurial ecosystem?
KBC: In India we are beginning to see the first cadre of successful entrepreneurs go back and start putting money back into other entrepreneurs. I think Narayana Murthy is showing the way with Catamaran Venture Fund where he is going to work shoulder to shoulder with entrepreneurs. It takes a lot of effort as people are not just depending on money but are looking for your advice. That’s why it is called sweat equity.

It’s going to be an evolution and you will not see the next Google spring up from here overnight. However, over a period of time, I feel India will become the birth place of the Google[s], and Facebook[s] of the future. Also, there are a lot of non-technology areas of entrepreneurship and we have plenty of opportunities in innovation, too.

E: How can this ecosystem improve?
KBC: Our ecosystem has many lacking, but I won’t call it stagnant lacking, it’s part of the evolution process. First and foremost, look at our system of labor laws. We still take a very long time to start a company because the laws have not kept pace with time. We have a long way to go when it comes to streamlining the labor and company laws that impede the starting and shutting down of companies.

Second, we need to create different shareholding structures and unique instruments so it’s easy to raise money for enterprising entrepreneurs.

Thirdly, we are still based on the British model in many ways. From a government’s perspective we have only recently started embracing some of the American concepts of venture capitalism. But if we have to be at the top of the pyramid vis-a-vis high-value job creation, entrepreneurship is the only way because this is where our intellectual property can be showcased to the world and you can get the best back. Our infrastructure is still spotty; services like broadband is still over priced.

E: Where do you see India progress/evolve over the next 10 years as far as IT entrepreneurs/innovators are concerned?
KBC: India will become the future capital of the knowledge industry. It’s not just IT but areas like life sciences [Kiran Mazumdar Shaw], innovative designs like Tata Nano, all show that we are beginning to see original thinking come out of India. We are at just the beginning, where we will become the leaders of the next generation of innovators. For that to happen, we have to encourage a lot of original thinking at universities.

Today, most of our universities are still run as training centers, unlike the U.S. which has created an endowment-based system over the past 200 years. This means there is always enough capital base available at the university to fund research and the government spends a lot of money. However, India is slowly coming in.

I set up the AUK research center 10 years ago. The lab-based inventions that get translated to commercial success is the dream of the country at the end of the day and very few countries have been able to achieve and sustain it. India is capable of it. We need a passion for research innovation, invention, an ecosystem of angel investors, and people who can take the concept from lab to market. Plus, we need those who will join these bright minds and dream of building the next big company.

E: What are your future plans?
KBC: For me, creating new companies is a way of life. I’ll die if I don’t create! I have a simple philosophy of building a new startup every 12-18 months. I also assume a lot of them will go bust.

We currently have five in incubation between Chennai and Silicon Valley. One of them, in India, is in the area of taking complimentary medicine system like Ayurveda and spreading it globally. The second one is in the area of social networking-inspired mobile coupons. It is being incubated in the U.S. and will move to India. The third one Serendio, incubated in India but now marketed globally, enables mining customer sentiments from social networks, blogs/conversations. Some others are in the areas of speech recognition, spread of education to secondary markets and low-cost diagnostic kits [bio-medical].

E: How many Indian startups have you invested in directly?
KBC: Since 1999 when I started investing in India, I would say about 25.

E: Why did you start a research center at Anna University, Chennai? What is its goal?
KBC: Oh, a very simple one—how to create an applied research center that can create a bridge to the lab-to-market concept. In effect, research is a means to create something useful to people. We work in the area of information sciences and life sciences. Serendio came out of it, all we need is one success and that makes us quite happy.

E: Your worst business decision till date?
KBC: I invested in eight mobile companies in 2000 only to find that by 2002 they had all shut/were sold. The market was just not ready. For entrepreneurs, worst business decisions usually involve wrong timing, betting on the wrong entrepreneur and thinking it’s a monster market when in actuality it turns out to be a very small one.

E: Who has been your mentor? Who would you call your role model?
KBC: My mentor has been Kanwal Rekhi. I would say my role model is Sam Walton because he came from a mid-town, no flashy background and built something step by step. He cared for and valued customers, was a simple man who understood the power of IT back in the 60’s and applied it to retail.

E: Your advice to entrepreneurs?
KBC: Stick to your convictions and do not listen to naysayers. India is a fertile bed for entrepreneurship. Don’t get too complacent with high-wages, high salaries and comfortable life. We need to be able to feel restless, dream and achieve the impossible.

©Entrepreneur August 2010

Tags:
Exodus Communications, Jamcracker, K.B. Chandrasekhar