Alan: Welcome back in here today with Venk Shukla. Venk is the current president of TiE, T-i-E. It's a Silicon Valley organization comprised of entrepreneurs here in the valley. welcome to today’s show.
Venk: Thank you Alan, thanks for having me here.
Alan: Venk before you got into Tie can you share some of your background and your career path.
Venk: Mine is a very interesting path in the sense that unlike most of the other people who came here from India looking for a much more challenging professional career and opportunity for success. Which at the time India, was driven by a socialistic philosophy sort of thing. A lot of really talented people came to the US and most of those who came from India were really talented people, very ambitious people who felt that they had no avenues for opening those skills and ambitions into play in an economy in India at the time. I'm talking about the 70s and 80s and early 90s but mine was a different case I think, of all the people that I know, I think I'm the only one who has a very different path in the sense that I was fine and happy in India. I was an electronics engineer, and then I got into in India of which used to be very prestigious s civil service offender and once you’re in civil-service at a middle management level you are directly recruited into middle management. And those who got there- it was a very competitive recruitment process: one out of one thousand people were selected. But once you got in, essentially you had the opportunity to investigate corruption charges against the government one day and the next case you could be supervising rural development schemes in some state and on the third day you could be looking at some aspect of running a domestic airline. It was a was a dream come true thing for me and I had absolutely no desire to come here. But my wife, she went to school here at Berkley, and she was working here and had made up her mind that the right place for me, being an electronics engineer, was Silicon Valley, and she managed to get me here.
Alan: Now I understand you graduated from ITT?
Venk: Yeah, ITT, International Institute of Technology.
Alan: International Institute of Technology there in India such as technology, but your education was furthered here in the US by going to...
Venk: I went to MIT and she was trying to get me here and she was already here working for an investment house in Sunnyvale. And so she was trying to get me here, I was trying to get her to move to India and then we compromised and I said okay ‘I always wanted to do a MBA from US’ so I’ll come and do my MBA, then we’ll decide. And then you know who won.
Alan: They always win
Alan: So you’re career path, you got here and did you say immediately I want to go start a company?
Venk: Actually no, I had no idea because during all my career in India I was in government, I was a bureaucrat, and that’s the last thing bureaucrats think of. For me it was a journey of self-discovery. My first company was a big company paradigm, I was successful at that, then I was recruited by a company here in Silicon Valley, Cadence and I was very successful there. And within two and a half years of joining- I started at the bottom in marketing and in two and a half years I was vice president of marketing there. So I did extremely well but I also realized that I was spending a lot of my time on things that I didn't like to do, this was attending meetings, preparing for meetings and following up from meetings and I actually did a calendar and I found that 80% of my time was meeting related… The thing that I enjoyed the most was working with engineers, or working with customers and that I got to do only 10% of the time. Because 80% was meetings 10% was all the HR related issues writing reviews and giving feedback and all those kind of things. The thing that I enjoyed most I was only doing 10% of the time and then I got an opportunity to spin off a piece of Cadence into an independent company and that thing didn't go anywhere but I realized that for me a startup is great. This was a long time after I showed up here- after 12 years of working, I finally realized that, that a startup is my home.
Alan: I’m visiting here with Venk Shukla he is a current president of Tie, a Silicon Valley organization comprised of entrepreneurs. Venk we need to take a quick break, we’ll be right back after these messages and I want to get back into your startup venture. We’ll be right back after these messages
Alan: Welcome back I’m visiting here today with Venk Shukla, he's the current president of Tie, a Silicon Valley organization comprised of many entrepreneurs, primarily from India, and Venk before the break we were talking about your venture into a startup. The first startup you went into didn’t go real well and then you decide, I’m going to try this again; I want to pick up the story there. So, you're in the startup and what gave you the inspiration to do a company?
Venk: You know, it was so much fun, the first one… even though it went nowhere and was frustrating the fact that I was spending time on the thing that I liked to do and the fact that there was a connection between what I did an impact on the company was intoxicating. Coming from a big company this was an exhilarating experience for me. So I said that I'm going to stick with a startup. I got recruited into Ambit. The founders had been talking to me for over a year and I had a choice- going to the big company or going to a startup. And the big company of course was a much bigger salary and with benefits and stuff and I said, I’ll try the startup, and this one was so hugely successful. In two years we sold the company for $260 million so that foray paid off very well. And that wetted the appetite… so startups are not only fun, you’re working on and if it works out, you will make more money in your life than you imagined you ever could.
Alan: For the listener’s sake, when we’re talking about startup companies the first thing that people think of is ‘I’m going to go out and do a company, but I need to raise money because I have none’. So at what point in time should an individual think of securing some type of Angel investing?
Venk: A good response to this question would have been very different five years earlier- Now my solution would be that you don't need any funding initially. Now what you need is- the cost of starting a company has come down so much. Now you can rent your computers by the hour, you can do all the payroll, all the HR, everything, you can buy that by the hour. So the things that used to take a lot of money to get started, are available practically free. There’s this open source revolution in software where a lot of building blocks are available off-the-shelf. The things that used to take a couple of years and 20 people to do, now you pick up off-the-shelf and start running with it. So unless you are thinking of a blue chip company or a semiconductor company or anything that requires hardware, anything to do with software the costs of getting started is very very small. The most important thing you can have is a cofounder because brainstorming with another person and having two heads to solve a problem makes a huge difference. If you get someone who is also willing to forgo his or her salary and believes in the mission enough to jump into it… and then depending on the type of problem you are trying to solve… if you're trying to solve an enterprise storage virtualization problem, I get that you need some money, but I think the most important thing now is that you can build a prototype for practically no money.
Alan: It’s interesting how times have changed and technology has driven a lot of efficiencies into the process which said, I think the end result is by not needing a lot of money in financing the pace of technological change has just been accelerated here.
Venk: It has, and the other thing that happened, is entrepreneurial attempts have exploded. Earlier on there were a 1000 startups in the Valley in a typical year, now there are probably hundreds of thousands of startups in the Valley because it takes so little to get started. Just yesterday we had a presentation from three kids about how inefficient the rental car market is at airports. And all the founders were drop outs from Harvard, MIT. and Princeton, all three of them. All three of them, they just dropout out.
Alan: Venk I want you to hold this message right here, I need to take a quick break we’ll be right back after these messages I want to hear how the story went, on the three dropouts and the car rental company we’ll be right back after these messages.
Alan: Welcome back we’re visiting today with Venk Shukla, he's the current president of Tie, but also a serial entrepreneur, and Venk was sharing with us a story, an experience that recently he had of visiting with three individuals, they were all dropouts one was from Princeton the other was from Harvard the other was from MIT and wearing the fact that they dropped out with a badge of honor and they were coming to Venk to pitch him on a new company, a rental car company. So let’s pick the story up from there Venk.
Venk: There were these three kids and they had a pretty unique insight and the unique insight was that people go to airports and they leave their car plus they have to pay parking charges. On the other hand there are rental car companies that have all these cars sitting there and the cost of renting includes the cost of space, real estate and all those kind of things. It's so inefficient for the person who owns the car as inefficient for the rental car companies and ultimately the prices paid by the person that’s visiting the airport. They had a very insightful idea that you drive your car, park it and they will rent it out for you while you’re gone and you’ll be making money and they’ll make money.
Alan: That's very insightful and I they’re starting out this company.
Venk: They were starting out and looking for some angel funding and one of our team was listening to them and said, “dropping out does not necessarily a guarantee of success.”
Alan: (Laughing) Yeah I can't see him giving the keys to his Maserati to the three kids. But let’s talk about, when people are getting ready to start companies and they're looking at new ideas, all these entrepreneurs they have their dreams but what’s one characteristic you believe every leader or every person starting a company should possess? In other words what would help the likelihood of their success in the venture?
Venk: I think the most important thing is passion and you have to have a belief in what you’re doing because no sane and rational person would ever do a startup. The cards are stacked against you from day one. So unless you have an overwhelming conviction in what you're doing you, will not be able to get the investors to get excited about you or your company. You will not be able to recruit quality people. You will not be able to convince customers to take a risk on you. So you have to have this incredible amount of conviction which is almost irrational. You have to look at the trade-off and say, ‘why should I do this?
Alan: You know that's interesting to a lot of lot of people from the outside, and looking at these entrepreneurs and the focus on all the successes but not many successes actually come to fruition. I guess, I don’t know what the statistics are-
Venk: The failure rate is very high, extremely high and depending on the segments, if you're doing something on targeting the consumer of the internet, I would say that 99.5% of the companies fail there. If you're focusing on enterprise and you have a deep domain expertise, than I would say- and you have track record, then I would say the failure rate goes down, but nevertheless, it’s not a slam dunk. That’s why I’m saying, rationally if you look at it, with the pros and cons and moving this way vs. that, you will never do a startup. I know a lot of people who said I want to start up and I‘ve been watching them for a long time. Every time they get an opportunity, they look at what the package is and all the benefits there are that and stuff, all the risk, and they never make the switch.
Alan: So what you’re seeing out there in the valley now, do you see any trends?
Venk: Yes, one big trend is emerging which is this. The trend is emerging that the fascination that the investment community had with consumer internet has practically disappeared and now people are back to what the valley has always been known for, which is solving in a big tough problems that companies have. Which is the database company start up, the in semiconductor startup. Essentially what was happening in the last four to five years is you could drop out of college and start a company, who knows if it's a good idea, you may become a billionaire and there's so many successes on that, there was a herd mentality and everyone was chasing those internet companies which are full targeting the consumers. I remember talking to a couple of VCs and they said “Look, I'm not interested in anything that solve the problem of big enterprise, I just don't have patience for that,” so he was looking to make the next Facebook, the next Twitter the next Zynga kind of opportunities. The clock has turned and has gone full circle. Now it is back for someone who has paid his dues who has been working 10 years at Cisco, Oracle, EMC or SAP and IBM or Intel and has figured out where the problems are today that the big guys are not solving.
Alan: Would you say the valley has come into the second stage of growth here or are we on the way to recovery.
Venk: We have recovered as far as the technology industry is concerned. The recovery happened a year ago. It’s so hard to recruit people right now in the technology industry, it is extremely hard, all kinds of people not just programmers, so far as the technology industry's concern, the problem is at the other extreme now.
Alan: So Venk we just have a short time here but people that want to find more information about Tie, how would they do that?
Venk: Well they should just go online, Tie.org. www.sv.tie.org
Alan: And that’s Tie as in T-I-E.org www.sv.tie.org
Venk: Yeah, and Tie stands for The Indus Entrepreneur
Alan: And you have a conference coming up
Venk: We have an annual conference coming up in May. We always hold it in the third weekend of May, Friday and Saturday and we’ve been doing it for 20 years now and it's been rated in the top 10 conferences worldwide for ideas and entrepreneurship along with TED, along with World Economic Forum. We get about 4000 people and get Who's Who of the technology industry and others to come in and speak to us and we never pay our speakers a dime.
Alan: Venk I appreciate you being out today’s show.
Venk: Thank you
Alan: We’ll be right back after these messages.
About Venk Shukla
Venk Shukla has had a long and varied career that includes sales, marketing, and general management, and a proven track record of leading companies through rapid growth. He has worked as senior marketing executive in large technology companies in the Silicon Valley and involved with numerous start ups as an investor, board member, or advisor. He was an officer in the 1977 batch of Civil Service of India before coming to US in 1983.
Interested in promising start ups as an investor, advisor, board member or as an agent of change as an executive / consultant in a bigger, technology based company.
Venk specializes in strategic thinking combined with execution expertise, marketing campaigns, off shore development, non profit management, fund raising, managing rapid growth.