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K B Chandrashekhar, 2 others launch 'global tech-holding firm' e4e

M D Riti in Bangalore

If you have a great business idea, they will pick you up and nurture you in their lab. If your company is young and about to take off, they will help you get on to the global marketplace. If you have a great marketing facility, they might invest in you and make you their channel partner. And they have a minimum of $300 million to do all this over the next three years. Plenty more money will soon follow.

So who are they? A brand new company called e4e, which describes itself as the first global technology holding company of its kind in India. "Our name -- e4e -- stands for Entrepreneurs for Entrepreneurs," says company chief executive officer Somshankar Das, who was a general partner with Walden International, and set up the Walden India Nikko Fund, the first technology-focused venture capital fund in India.

e4e, which was launched officially in Bangalore on Monday, has three co-founders: K B 'Chandra' Chandrasekhar, the internationally famous founder of Exodus Communications of the US and chairman of Jamcracker and of Sabeer Bhatia's Aztec, which is about to launch its initial public offering this week, Somshankar Das himself and Dr Sridhar Mitta, who was chief technology officer of Wipro Infotech and headed its global R&D division.

"At the end of the day, venture capital firms remain money managers at best, although they claim that they add more value to the companies they work with," says Das, explaining his decision to move from Walden into e4e. "With a company like this one, we hope to achieve much more as our approach will be very focussed, our domain-knowledge thorough and our ability to invest capital long-term. Here, we will be working proactively with start-ups and very young companies."

Chandrasekhar is the e4e chairman, but will not be involved with the company's day-to-day operations. He will help the company evolve strategies and provide an external perspective. Das will be based at Santa Clara, California, which is the US headquarters of the company. Mitta will head its Indian operations, the offices of which are now at Divyashree Chambers in Langford Town.

Also with e4e are Poornima Shenoy and Anuradha Parthasarathy, the enterprising head hunters from Bangalore whose executive search firm Nexus Consultants made quite a mark for itself in the IT industry. Shenoy will be located at Bangalore, while Parthasarathy will be at Santa Clara. These two young women will help e4e build good teams of people for its portfolio of companies through talent searches.

In addition, Parthasarathy will help business development in the US, while Shenoy will help maintain a good network with the industry outside the company fold.

"Good people are necessary to make a company successful," says Chandrashekar, explaining that Exodus survived its initial hiccups largely because of the support of dedicated employees who stayed on even when they could not be paid salaries. "We will help sustain an extended network of successful entrepreneurs and senior managers with a vested interest in helping e4e succeed," says Shenoy.

Then, there is Fred Greguras who will handle all legal matters globally, and who is well versed in IP and trademarks through his work with Fenwick and West. Anand Talwai who used to be with Wipro-BT will work on strategy, technology and operations. Subhash Reddy, who was with Ariba and Dun & Street, will take care of global sales as well as market research.

And where does their money come from? Well, from a large number of investors: Walden International, Global Internet Ventures, LNM Internet Ventures, New Enterprise Associates, and individuals like Chandrasekhar himself, Frank Bonsal, Jr. of New Enterprise Associates, Peter Howley, CEO, IP Wireless William Melton, co-founder of Verifone and Cybercash, Ashok Narasimhan, founder of PRIO and Prabhakar Sundarrajan, vice-president (technology) of Exodus.

However, e4e's support is not available to anyone who wants it. They will focus only on 10-12 companies, whom they will identify over the next three years, all in a specific technology area of Internet services. "You cannot really manage more companies than this cohesively," points out Reddy.

According to Mitta, they have already found two core group companies, whose identity they might reveal within the next month, as they are now doing 'due diligence' or investigating their background thoroughly. They also have two ideas incubating in e4e Labs, a subsidiary of the parent company, which will help entrepreneurs with good ideas and little else to test out their idea with minimum risk and cost. Finally, they have also identified two channels in which they will invest, to help their core companies access the global market place better.

The companies they mentor are likely to be founded by Indians, whether in the US or in India. As of now, three of the companies with them are in India, and the other three in the US. "The trend and span in Silicon Valley too is that 40 per cent of the start-ups are by Indians," points out Reddy.

Essentially, these will be the three types of investments e4e will make. First, in their growing stable of core companies. Second in business ideas for e4e Labs. And, third, smaller investments in channel partners.

How will they identify all these three kinds of companies? Either through applications or approaches made to them, directly or through their Web site. Alternately, they themselves might go after people they consider worth pursuing.

e4e Labs will nurture ideas for technology start-ups, partner with leading institutes, help entrepreneurs develop ideas and also defensible business plans to target global markets. It will also provide technology expertise for e4e Inc and its partner companies, identify technology trends and opportunities, and develop new technology for partner companies through in-house R&D.

"After the phenomenal successes of services provided by Exodus and Jamcracker, I see a huge potential for 'next generation' companies focused on infrastructure services, emerging from India," says Chandrasekhar, whose company Exodus Communications, which manages Internet Web sites and infrastructure for ebay, hotmail and yahoo!, was one of the most successful IPOs of 1998.

"India has the talent pool of entrepreneurs who have the potential to become global successes. We would like to use our combined resources to help such entrepreneurs build Silicon Valley type successes right here in India."

This is what e4e describes as 'thought leadership', and that it describes as an important part of what it offers its companies. "Our people have significant experience building service companies," says Mitta. "Our internal market research, technology expertise and business development strategies are focused in this space. This focus helps e4e identify emerging trends and opportunities."

The past couple of years has seen a sudden influx of venture capitalists, venture capital firms and business incubators to India, especially to Bangalore.

How does e4e profess to be different or better? "Our basic goal is to help entrepreneurs position for global success; by providing them with the resources necessary to successfully build a company and sustain profitable growth," says Das.

"Technology holding companies like ours have certain unique characteristics," says Reddy. "For one thing, we have a sharp focus. Then, we have an experienced operations team. Third, we provide excellent customer access by investing in our channel partners and thereby making them more motivated. Finally, we enter into long-term partnerships with entrepreneurs."

"Everyone can promise to deliver the same things. But the real test lies in what resources you bring to the table. First, if you promise technology and global access, can you deliver? What is the track record of the people you say can provide whatever help? Everyone is new in the business of VCs, accelerators and incubators, only the track records of the people can help you judge who is good," says Mitta.

Like the others, e4e too offers physical infrastructure, but not just in India. It has office accommodation available even in Silicon Valley, where space has now become hard to find. The company has over 12,000 sq ft of space in Bangalore and 5,000 sq ft in the heart of Silicon Valley to house 10 start-ups. The offices are fully furnished, have state-of-the-art computing infrastructure, dedicated connections to the Internet and complete administrative support. Entrepreneurs can use these facilities to jumpstart their India or US operations and reduce their time-to-market significantly.

A major distinguishing feature, undoubtedly, is the sharp focus that the company has: it aims at purely Internet technology-based, infrastructure service companies. "These areas will evolve as markets change," says Das. "However, Internet infrastructure will certainly be a key area of interest for us, and networking our key technology for that."

To start with, e4e will focus on the following areas:

• Network management services: The management of IP-based networks on a 24x7 basis;
• Managed IT services: Management of IT assets of an enterprise on a 24x7 basis utilising the Web as the delivery vehicle;
• E-business consulting and implementation services: Integrating business and legacy IT systems with new generation ebusiness enabling technologies and products for Fortune 5000 enterprises;
• Wireless data services: Planning, design, implementation and management of wireless networks and value-added services for carriers and enterprises;
• Customer relationship management services: Consulting and implementation services, operational CRM and analytical CRM.

Unlike the venture capitalists, e4e will also provide long-term capital, which will not just focus on a specific stage of the company's development but will continue to come in from company inception through IPO or other liquidity events and beyond. This, the company points out, ensures continuity, reduces time spent seeking additional capital resources to fund expansion, and provides shareholders with better opportunity to achieve significant long-term value.

"Now, we are all ready as one hand, waiting for the other to come along," said Das to rediff.com. "You need two hands to make a clapping sound. We are waiting eagerly for all the other companies, to whom we can be long-term knowledgeable partners."

And where does he see the company, three years from now? "By then, we will have all our chess pieces in place, and will start playing the game seriously," he quips.

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