The Indian Meta-Entrepreneur

Som Das

It is hard to believe that thirty-seven years have gone by since I arrived in New York City from Bombay in August 1983. It was my very first overseas trip.

After two weeks in Long Island, spent with a cousin and his family near Brookhaven National Laboratory, I arrived in San Francisco, to be greeted by my homestay family, Frank and Connie Barrell. They are wonderful folks with whom I have remained in touch.

I arrived alone; my wife Toru joined me two months later in November. I remember her first reaction after reaching Stanford campus: “Where are all the people?”

I have always wondered what got me accepted into the GSB. I had declared I would participate in the Public Management Program (PMP). In hindsight, I would say it was my tenure and career in the Indian Administrative Service (IAS), with a unique set of work experiences that were quite different from those of my fellow classmates. At age 30, I was responsible for an administrative territory almost 10,000 square miles in size with a population of two million. Subconsciously, I was absorbing the skills of matrix management – supervising the work of multiple government agencies in a district / county of which I was the General Manager.

Going back to school after twelve years required effort – considerable effort, in fact. I had to relearn how to ride a bicycle and how to cook (at least until my wife joined me.) I had to figure out how to get through the GSB program with just $5,000 in my pocket, when I was going to face a price tag of $40,000 for my MBA education over two years.

Completing the GSB program without taking out any loans was my first success in entrepreneurial achievement. The key break came when I was hired over the summer of 1984 to write the business plan for a microwave device packaging startup called Interdevices. The CEO, Bert Berson (an ex-HP executive), took a liking to me and asked me to continue working with the startup after the summer engagement had ended. My task: help raise $3 million for a Series B (1984–85). Remember, in those days, there were no Y combinators, no angel investors, no SAFEs.

I joined VLSI Technology (a semiconductor startup just gone public) when it was generating only $8 million in revenue. I left after eleven years, when the revenues had increased to more than $800 million. Silicon Valley startups were very different in those days – most were hardware companies. The first major software breakouts were Oracle in the San Francisco Bay area and Microsoft in Seattle.

The regular work at VLSI Technology was boring at times; especially after the nine years I had spent in the IAS. (Public sector work can be very exciting because you tackle very big problems.) But I had a great boss, Charles Clifford Roe from the UK, who gave me the “license to kill”: to explore new business initiatives. The chairman of the company, Alfred J. Stein, also encouraged me in that endeavor.

The net result was that I got to outsource to India, Hong Kong, and Singapore lots of EDA software for chip design (in excess of $2M in market value), and to build a wafer fab, Siltera, in Malaysia with an investment of $1.5B.

Among the lessons I learned, even in the middle of a major crisis (the Asian financial crisis of 1997), was that we could raise more than $1B in syndicated loans with the sovereign guarantee of the Malaysian government from their national fund, Khazanah (which in Arabic literally means Treasure). For me, Siltera was the transition from the semiconductor industry to the world of venture capital. In 1997, I joined Walden International. Its founder, Lip Bu Tan, is now the CEO of Cadence, the EDA software company.

My first big challenge at Walden was how to learn to use a Windows PC, after having spent ten years working with Mac products. It was a miserable transition. Fast forward: I have been using Windows machines for the past twenty-four years and can report that Microsoft has gotten better and better, especially after Satya Nadella took over as CEO from Steve Ballmer and made Microsoft a cloud-first company. The company is valued at $1.3 trillion and this is reflected in my happiness with today’s PC. (I am writing this essay on an HP Pavilion X360.)

What were the big milestones in my very short tenure as a VC (1997–2000)?

First, an investment in WebEx, where I continued as a board member of a NASDAQ listed company until it got sold to Cisco in 2005 for $3.2B. Incidentally, the wildly popular Zoom is derived from WebEx. The Zoom CEO, Eric Yuan, was the engineering VP at WebEx during my association with the company. This is one great example of how some tech companies have benefitted and grown from the COVID-19 crisis.

Second, I set up the $30M Walden Nikko Capital India Fund in 1997, one of the earliest offshore VC funds in India at that time. I invested alongside Draper International, started by Bill Draper and Robin Richards (the latter, also a GSB alumnus.) By comparison, today the startup environment in India has PE and VC funds deploying billions of dollars in both early-stage and growth-stage tech and non-tech companies. This phenomenon has been accelerated by the very strong links between Silicon Valley and various technology centers in India–Bangalore, Hyderabad, Gurugram, and others.

As an early mover, I never went out in search of deals; the deals walked into our office in Mumbai. One such deal, Mindtree, an IT solutions company, became a $1B revenue company, listed on the Bombay Stock Exchange. It was an early example of a VC-funded company going public in India when most VC-funded companies, even today, get acquired. However, unicorns are coming out of India these days which, I suppose, will become public companies at some point in time.

But I was never meant to be a venture capitalist. So, while I learned a lot about and practiced early-stage technology investing, I yearned to be on the entrepreneurial side of things, building technology businesses.

My break came in 1999 when I met one of the founders of Exodus Communications, K. B. Chandrasekhar (KB). Exodus was an interesting company. It was essentially a data center company (value-added real estate) that supported the infrastructure of early Internet companies like Hotmail, eBay, Inktomi, and so forth. Those were the heady days of the dot.com boom. People with MBA degrees had the capital to start Internet businesses even though they had neither engineering talent nor infrastructure services. This led to the rise of “outsourcing services,” and Exodus benefited immensely. Its valuation rose to $80B. Early investors were wildly successful.

Then came the crash of March 2000, and Exodus plummeted from its highs to a low of $500M. It was a sobering lesson for everyone. What killed the company was unfettered expansion (led by Ellen Hancock, ex-IBM and ex-Apple) into multiple locations using huge amounts of debt. The markets crashed and Exodus went down with them.

KB and I decided to build a services company that would deliver services remotely. How? We had no idea, but I was coming off my WebEx experience and KB was coming off his Exodus experience. Our hypothesis was that we could use the freshly laid-down global telco infrastructure (think Global Crossing), the fat pipes, to deliver remote services. And we did it in the form of a new services company we started, called e4e Inc.

Neither KB nor I had any idea about what business we were getting into, or whether we would succeed! We had raised $65M by June 2000, and so I had my share of worries that come with fiduciary responsibilities. In hindsight, while we were raising money in early 2000, investors had no idea the markets would peak in March 2000. So we got lucky and we had a strong balance sheet when 9/11 happened. All of a sudden, business started drying up.

At the same time, with our customers facing cost pressures, there was a move towards outsourcing and offshoring. Y2K had set a precedent; e4e started to get business, and volume picked up from 2002.

Essentially, we had created one of the early Business Process Outsourcing (BPO) companies delivering services remotely. Over a period of six to seven years we built up a marquee list of clients including Symantec, CitiBank, SonicWall, and Polycom.

The BPO industry has always been very people-centric; the core change that enabled the BPO industry to flourish was advances in data and voice communication technologies. We could work remotely.

After ten years as the CEO of e4e, I stepped down in 2009 from its operations; I needed a break.

My family had grown in the meantime. My older daughter Sheila arrived in 1997 and the younger one, Shonali, in 2000. E4e had grown to about 3,000 employees worldwide and had become so time-consuming that I completely missed out on the first ten years of Shonali’s life. It was an eye-opener for me. I had become a “work silo.” I wanted to spend more time with my wife Toru and my daughters. I had to make a change.

In 2010 I had to decide how I would plan my next twenty-five years. I needed to create my own model of retirement. And I came up with a hybrid model of investing personal capital with hands-on involvement helping startup teams to scale their businesses. This model has worked very well for me over the past ten years.

Nowadays, I work actively with a small set of technology companies in areas such as cloud computing, SaaS solutions, automation (digital workers), AI, and machine learning. My work covers a wide variety of industries including technology, finance, agriculture, and manufacturing. My engagement model is that of a “meta-entrepreneur”: invest personal capital and help scale the businesses. The latter takes the most effort and it is what keeps me engaged.

As I write this essay, my focus is shifting to what my daughters are doing. I am trying to see the world through their eyes. It is a new world that we will age in, and I look forward to being in a continuous learning (but not continuous doing) mode over the next several years. Living in the San Francisco Bay area, within fifteen miles of all major tech and Internet companies, means there is never a dull moment. I will have to learn to live a quieter life in a place where I am continuously bombarded with new ideas and visions of change.