It is almost as if the mainstream media all simultaneously discovered the existence of the Indian diaspora that was creating a mountain of market capitalization on the NASDAQ in 1999 and 2000. The Wall Street Journal ran a narrative on Indian entrepreneurs who were seed-funding companies started by their friends and classmates from the motherland. Fortune rhapsodized on the tight ethnic networks that had resulted in companies such as Exodus and Juniper, while its sister publication, Time had a piece on the explosion of creativity that the same group had exhibited in creating everything from Hotmail to “The Sixth Sense.” A Berkeley study pointed out that a quarter of all new technology companies in the Bay Area were founded by people of Indian and Chinese heritage. And one estimate placed the new wealth created by TiE members in seven years at a $150 billion.
The numbers will have to be re-done again, of course, to reflect the current bear market in technology stocks. But even in the backdrop of these withering conditions, the conference organizers show extraordinary ambition. In 1998, there were 600 people sitting raptly in the audience at the San Jose Fairmont. This year, that same hotel could not accommodate the influx of the 2500 expected attendees. The number of sponsors has grown from a dozen to sixty. 25,000 square feet has been set aside to showcase 110 new startups. There will be six special interest groups that gather on the evening before the weekend starts, to discuss topics ranging from biotechnology to optics. The entertainers for dinner are flying in from other countries. The keynote speakers are nothing less than the CEOs of Tibco, Hewlett-Packard and Cisco, corporate stars all.
The themes for the previous conferences had been unfailingly bullish, a function of times where every graph went upwards and to the right. The panel discussions and speeches concentrated on how to generate ideas, create product, gather teams, raise financing, and sell into a ravenous marketplace. The last twelve-month period has been much more sobering. The stocks of many technology companies have fallen by three-quarters, and the daily papers have more news of layoffs and distressed company auctions than of new financing and expansion.
Mindful of the change in the surroundings, there is a new note of sobriety to the conference. The theme this year is “Entrepreneurship – back to basics.” In 2000, an entire track of the conference focused on the steps from napkin to Powerpoint to funding. That the idea on the napkin would be funded seemed never in doubt. This year, in contrast, ten companies out of a few hundred applying are being selected to pitch their plan in front of a group of venture capitalists and a skeptical audience. The group gets to offer instantaneous feedback on the plans by clicking on wireless devices, so that the company gets both an immediate and public critique. It is a Gong Show for Go-Getters.
Similar contrasts abound. In 1999, one of the sessions was titled, “Creating a buzz.” This year, we have “Reinventing the business during uncertain times.” Even the pace of change seems different. Where once a panel talked about “Competing in Internet time,” now it is on the more ponderous “Journey of an Entrepreneur.” The conference organizers have reacted admirably to the environmental change, much as a good businessperson would.
What has not changed is the quality and reputation of the speakers. Three years ago, in a sign that the Valley was finally acknowledging the importance of the contributions made by the Indus entrepreneurs, Larry Ellison keynoted at the conference dinner. This ability to attract one of the two or three most important figures in the technology firmament caused observers to sit up and pay attention. The shifts, subtle at first, have grown to seismic proportions. Since then, 266 of the Fortune 1000 companies have started outsourcing their software work to India. This has resulted in a hundred-and-sixty-fold increase in the revenue of that Indian industry in the last decade. Five Indian billionaires have entered the Forbes 400 list of richest Americans. An ethnic group that makes up about one-third of one percent of the American population now accounts for seventeen percent of the Siebel scholarships awarded to the best graduate students in business and computer science.
The presence of a Jim Clark or a Marc Andreessen at the conference nowadays raises few eyebrows. Indeed, if people of their reputation are absent, the question is more about why they are not there. The list of speakers this year would not be out of place at the White House, Davos or Sun Valley. It includes the dean of the business school at Berkeley (and former chief economic advisor to the U.S President); the head of venture investing at Intel; the president of global investments at Merrill Lynch; the chief technical officer at Sun; the head of mergers and acquisitions at Cisco; and partners from every first-rank VC and law firm in Silicon Valley.
The topics this year seem less about the grand vision and more about the nuts-and-bolts of starting and running an enterprise. Going by the agenda, one can expect to answer the following questions: When is a risk worth taking? How do you create a revenue model? When do you want to raise money in a bridge round and when do you want to issue debt? What happens if money gets tight and you have to suffer some dilution of your equity? Does corporate culture matter or is it fluff? How do you reinvent a company if your original plan goes south?
As important as the knowledge gained in such a venue, though, is the access that members of the audience gain to successful entrepreneurs, who to not put too fine a point, are not much different from themselves. The autobiographies of almost everyone in attendance are variations of the same theme–undergraduate engineering degree from India, graduate school in the U.S., the first job at a Fortune 500 technology company, the first apartment within ten miles of Pasand restaurant. The crucial inspiration comes from being able to talk to a Kanwal Rekhi, and to find out what prompted him to leave a Vice President slot at Novell to eventually help reframe the strategic direction of Exodus. Or to listen to Raj Jaswa explain why he came back buoyant to found another startup called Selectica after leaving his first one. These are experiences that you cannot have at a Chamber of Commerce dinner.
Bakul Joshi, an organizer of the conference, says that the most important thing that a first-time entrepreneur needs is “the sense of possibility.” By this, he means an expansion of one’s thinking to encompass the idea that great things are possible by efforts emanating from oneself. This thought process can be helped considerably by meeting, exchanging ideas, and collaborating with people who have trod the path before you. TiE has provided this kind of venue for the genesis of many companies, ranging from VxTel to RightWorks. In many cases, the early financing for such companies has come from people first met at its monthly meetings.
America’s peculiar genius has been its ability to absorb the talents and influences of every new ethnic group that washes upon its shores. The motion picture industry was founded by a wave of Jewish immigrants and jazz came almost entirely from the black community. Nuclear physics was largely a result of scientists fleeing wartime Europe and the great Latin influx has influenced everything from baseball to salsa music. The technology industry is the field that most feels the influence of newcomers from the Indian subcontinent, who manifest their presence in everything from credit card verification to laptop computers. The next change in some way you run your life may very well come from that twenty-four year old sitting next to you at Tiecon 2001.
Saturday-Sunday, June 23-24. Westin Hotel Santa Clara and the adjoining Convention Center.