Kanwal Rekhi, chairman of TiE, who sold his company Excelan to Novell and became chief technical officer there, says, “No one had believed in us. We had no role models. Maybe we could be some for the next generation.”
The first conference was a runaway success. They expected a couple of hundred people. Five hundred showed up. They realized the conference needed to be annual. They formalized the membership, started monthly meetings and invited industry leaders to come share their experiences. Now TiE is 10 years old.
Kanwal Rekhi, entrepreneur, investor, and godfather to dozens of start-ups, talked to India Currents about an organization that the World Affairs Council recently honored for becoming “the world’s leading non-profit entrepreneurs’ organization … with 29 locations worldwide spanning seven countries.” But the location which houses the mother ship, (or it is the central processing unit) is a low unassuming office building next to a bingo hall in the heart of the office parks that stud Silicon Valley.
How did a physical office get established from meetings at the Hilton?
We had the TiE office for a while but it was not very organized. We only opened it during the weekend. Around 1994-95 I had pretty much retired and my wife was getting fed up having me around at home. She said, “Why don’t you go find yourself something to do?” So I started organizing the TiE office. I set up the computer networks, installed the phone switch, set up the voicemail. People would drop in and I’d welcome their company because I was doing nothing anyway! I’d listen to their ideas and critique them with really no other purpose than to kill time.
But in a way it gave TiE a big boost—because I was able to give it a lot of my time.
How has the TiE conference evolved?
We have changed the recipe quite a bit. You know the first conference had about 500 people. The last one had 2,600. This year we are hoping for 3,000. But the difference is the first conference was much more about tutorials—about how to do things. Now we have many more interactive panels. Before it was more like a seminar, now it’s a real conference.
What about the attendees? Has their profile changed?
Initially it was much more about our charter members giving wisdom to a younger generation. Now it’s much more about networking. I see a lot more energy. Also at the last conference 30 percent of the people came from outside the area including some 100 or so people who flew in from India.
The dot-com bubble, which promised you could sell anything on the Internet from pet food to antiques, has burst. How has that made a difference to TiE’s philosophy?
TiE is fundamentalist—we always focused on the fundamentals. I started to speak out against the dot-com phenomenon long before others did. In 2000, at a conference in Bombay, I predicted that 95 percent of the dotcoms would fail and fail soon. The Economic Times called me a Prophet of Doom.
Then I gave an interview to Fortune magazine in May 2000. They were interviewing what they called the 20 smartest people in the Silicon Valley about whether the boom was over. Nineteen of the 20 said no, this was just a temporary setback. I was the only one that said it’s over, it’s time to get back to honest entrepreneurship.
Why did you feel dot-coms went against the fundamentals?
They did not make sense. I am an amateur economist but a passionate one. The iron rule of modern capitalism is capital and resources will flow to the most efficient users of capital.
Dot-coms were the least efficient users of capital—they promised no returns or somewhere far away in the future but spent tons of money on advertising. I also believed that experience counts for something. But in the dot-com world, experience was pooh-poohed. This offended me intellectually.
It created a real conflict in me. I would look at people’s business plans and say, “this is nonsense.” But then they would just go to the next venture capitalist and get their money! It became embarrassing.
But by mid-2001 people were seeing the darkness at the end of the tunnel. Then people started coming back to honest hard-nosed entrepreneurship. Entrepreneurship blossoms in hard times. If you are doing well at your job at Sun or Microsoft, you are in a rut of product releases and beta deadlines. It’s when you lose your job or the person next to you loses his job that you think, “what am I doing this for. Perhaps I need to work for myself.”
TiE has started working with projects in Pakistan. Some Indians feel TiE should not be working with a country with whom India almost went to war recently?
If you have a balance sheet for India and you have assets and liabilities, every time we end up in a conflict with Pakistan, that’s a liability. Our issue was how to make Pakistan more of a positive for India. If Pakistan is not prosperous and stable, India cannot be either. In the end both will win or both will lose. If people come to me I don’t care if they are Indian or Pakistani—business unites, politics divides.
China and Taiwan seem to be two countries that despite serious political differences realize their economic futures are entwined together? Might that model work in South Asia?
Both India and Pakistan have tended to put economics behind politics. It’s the reverse for China and Taiwan. They may shout at each other but business goes on as usual. China has the capacity to be pragmatic.
India and China started at roughly the same place 20 years ago with 1 percent of the population having phones. India now has 3.5 percent connected with phones while China has 20 percent. China has really developed its domestic market. India has a large number of smart people that we can tap into. Our tragedy is that in the name of socialism, the state took over everything. But India had a false socialism. One thing socialists were good at was human resource development—education, health, sanitation, infrastructures. That’s true of Soviet Union and China but not for our sham socialism.
What about the new organization for Pakistani entrepreneurs, OPEN? Is TiE involved in any collaboration with them?
Not really. It’s better than nothing. If you think you are better off doing it separately, I say more power to you. But I don’t know if they can make it, because the idea should be about how we can get more resources for everybody, not limit and divide resources.
What would you say TiE has done to the image of the non-resident Indian?
You mean the “non-relevant Indian” or “the non-required Indian.” He had the image of someone who left for greener pastures and came back like the ugly American ready to buy you ten times over.
Now we have this image of successful people who are from the middle class, who are accessible, not like the Birlas and Tatas. The average middle class can dream of becoming like that—you can go to IIT and feel like you can compete with the best and brightest in the toughest marketplace in the world and come out on top. The fact that we are people who did leave India but have come back, not just to show off and lecture, but to encourage entrepreneurship has made a huge difference to the Indian psyche.
Some South Asian activists have complained that though TiE has the bully pulpit because of its tremendous financial clout, it has been loath to use it when it could have made a big difference—like when hate crimes against South Asians spiked after Sept. 11.
The charm of TiE is that it single-mindedly focuses on one and one thing alone. As you become more and more things to more people, you lose some of that focus. We did not speak out on Kargil, or bomb blasts or other political issues. Political issues are divisive and I’d want TiE to stay above the fray.
It will be a sad day when TiE starts to speak out on all these issues because no two people can agree on these things—like say India and Pakistan. We could become like the FIA and divide and subdivide.
What are the main challenges facing TiE?
How do you stay relevant especially in lean times? Or are we just a fair-weather organization? The measure of success is simple. Unless we keep producing success stories like Sabeer Bhatia we will not remain relevant. Only by being successful can we plough some back and keep it going.
People sometimes fear TiE could become another FIA, which has its problems and infighting. After all we have the same genes! But I say, in India you have the home and you have the baithak for the guests. Even if the home is a little messy, the baithak is always clean. TiE is the baithak of the Indian community and I think we all have a vested interest in keeping it clean.
Looking back if you had to single out three achievements what would they be?
We have changed the Indian way of thinking that a businessman is necessarily corrupt and self-serving. People think now that entrepreneurship is fundamental to your success.
Secondly, we have shown that Indian people can build first-class institutions and brought selflessness into the process.
Third, I am most proud that our organization is one that draws both our generation and the younger generation. The younger generation usually goes to their parents’ parties under duress.
What does TiE have for that generation?
Our kids have none of our cultural handicaps. If they have even half our drive, I can only say the best is ahead. And not just in technology. For us, technology was a safe harbor. My son wants to be a director/producer in Hollywood. My daughter is focused on politics. They need no safe harbor. I hope TiE inspires them to be even better than us.
TiE five years from now. What do you see?
My friend Suhas Patil says it best. He says we should inspire in India a new freedom movement—but this time an economic freedom. Remember the Purna Swaraj (complete self determination) movement of the ’20s? That idea came from an NRI as well—Gandhi. Now we want that to happen economically and we want to pull the best and brightest into it. I am very hopeful of India. More than money, what it needs are ideas. If money were everything, Saudi Arabia would be the No. 1 country. But if ideas come, money will flow.