'Good dot-coms are always going to survive'

He looks like a man who has it all - a good-looking face, millions of dollars, a home in the Bay Area of San Fransisco, a wife and three children, and several successful businesses under him. Barely a decade ago, K B Chandrasekhar was just another software support engineer working for Wipro Infotech in Bangalore. The nineties took him to the US as country manager for Rolta India.

Soon after, he started his own first company Fouress Inc, a network software design and development firm. Then came his magnum opus Exodus Communications, which he started with fellow Indian B V Jagadeesh, that went public successfully a couple of years ago. Last year, Chandrasekhar was awarded the Ernst & Young Northern California Entrepreneur of the Year in the US.

Now, Chandrasekhar has the reputation of having the Midas touch. The Aztec IPO, which is expected soon, is being watched by all with keen interest. So is e4e, the new technology holding incubator company that he launched with two other co-founders on Monday. Chandrasekhar spoke to M D Riti when he was in Bangalore for the launch of the tech-holding company e4e.

Was the idea for the new technology holding company e4e yours?

No, it was a combined idea of Som Das, Sridhar Mitta and mine. It was not an overnight concept. Mitta and Som were both involved in the service industry, and I was involved with Exodus and Jamcracker. We all saw a common factor emerging, seized it and decided to launch this company.

How do you pick companies to mentor or get involved with? Is it gut feeling or do you use specific criteria?

It's mostly a question of how close you feel to it. If you feel that you can add value, you start getting involved, depending on your bandwidth and availability. That's what happened to me with Aztec and the others. I got interested and wanted to see that they were successes.

Web hosting is just beginning to take off in India. How do you see this business emerging here? Will it be easier to run web hosting services from India than from the US?

It is not about being better from India or elsewhere. It is all part of a global ecosystem, when you are going to be running, whether you like it or not, across multiple places. There is no way you can run one site from one place, because of considerations like speed, local language and what not. Often, it's better to run it out of multiple places. India could as well become the hub for running lots of Asia-related activities for a number of places, depending on fibre speed. Web hosting is going to take off in India, not just for the Indian market but also as a general service for surrounding markets.

Does the web hosting business call for major investment?

It is not cheap. It is an extremely complex and capital-intensive business if you want to run it well. The cost depends on the quality level and how much the market can afford to pay.

Who do you see emerging as the major players in web hosting?

B V Jagadeesh helped to set up a company called Netmagic. I am sure that it is going to do well. There must be a lot of other players as well.

What is the expertise required for this service?

When you have a web hosting business, failure is not an option. Every second that you cannot accept a client, you are draining hundreds of thousands of dollars of potential business. Any of the companies that have been built around Internet as the primary distribution or business model, would need service 24 hours a day, seven days a week, 365 days of the year with no holiday whatsoever. You have to reach the level of availability and scalability at which your clients take you for granted.

What do you think could be done to encourage the venture capital environment in India?

Compared to two years ago, the scenario today is a hundred times better. If you look at the volume of investments that have come into India in the past year, since we started pushing VC as a movement in India, the growth is substantial. Numbers like 30 funds are now being quoted, with money of over 2.2 billion dollars between them. That is a big sum. But of course, it is still the beginning. Now e4e is adding another few hundred million dollars to the kitty, just as venture capital in this market.

India is going through a big dot-com phase now. Where do you see all our dot-coms two years down the line?

Good dot-coms are always going to survive but it should not be a mania. Most people jumped into dot-coms without a proper business model. They could not have survived, whether they were dot-coms or brick-and-mortars. Such people give a bad name to dot-coms, that's all.

Is e4e going to be different from Jamcracker?

e4e is going to be a platform to encourage a whole lot of companies to come around under one common umbrella, to make India the global delivery platform. It will also provide a global platform to bring together ideas and people and create the service economy of the future. Jamcracker will become one piece of it. E4e is an investor in Jamcracker.

What are Exodus' plans for the presidential campaign?

I don't want to comment on that! Exodus being a public company, one has to be very careful about what one says. Whatever is public is already out there.

Do you think you could have reached where you are today, or achieved this kind of global success, if you had stayed on in India?

Not at the time I left. Not in 1990. Today, yes. Today, if an entrepreneur wants to think global, he can do it right out of India without having to move out. The Internet is a big equaliser. It allows you to set up businesses elsewhere in the world sitting right here.

But there is still a feeling that if you want to succeed, you should be listed on NASDAQ and not on the Indian stock exchange.

You can see the trend happening the other way. Many companies are moving away from the US and trying to list in India. It's a question of maturity and liquidity of the market. It takes time to make that happen. You can raise a few million dollars on the NASDAQ. That kind of liquidity will take here.

You have always said that people are what made all your companies a success and brought you this far. Do you really maintain that only great people can make a successful business?

You can buy everything for a company other than the people. You should have the right people to make a company a success or a failure. They are the engines that drive companies.

More than 40 per cent of Silicon Valley consists of Indians. Do you see larger percentages of Indians dominating the global IT industry?

This is not an overnight phenomenon. Indians have been accumulating in the Valley and other places for 20 years now. These people are now bubbling to the top and saying they are now ready to do things on their own. This is the product of 20 years of labour. You have a fairly large pool sitting out there. Statistically, a large number of them are bound to bubble up to make things happen now.

Is it easier now for these people than it was when you went 10 years ago? Or are there more people competing for the same spaces now?

Entrepreneurship is never easy, how many ever times you do it. It's always very hard. It is only that raising money may be extremely difficult or moderately difficult - or people may just come and give you the money easily based on your reputation. For an Indian, the problem in the past was that people did not know if you had the credentials to start a business. You had no track record to show. Now that is no longer an issue.

Still, you find that success seem to be happening more to Indians based in the Valley than those who are here. And the Indian IT industry is still bogged down to the level where service providing is limited to implementing other people's designs.

That is a phase. You have to understand the environmental parameters first, and how you execute them. Then you find that in the pyramid structure, only a few are going to bubble up and say, based on the knowledge I've gained, I am going to try something new. This is a market evolution, not something that will happen in a discontinuous manner. India is going through this evolutionary process. That is why you will see that the amount of entrepreneurship happening in India is amazing and mind-boggling compared to what it was a few years ago.

You seem to be very good at sensing the next boom in the IT industry. You got into web hosting when it was just taking off, and now you have started an incubator. What do you predict will be the next exciting business that will soar?

Utility companies and pervasive computing, where people will not worry any longer about what applications they buy or run. Today, you can go to Rediff.com and give the stock symbol and get the quotation. People want to be getting everything like that, without having to figure out whether you have to install your own terminal.

So will you be getting into this area soon?

I am there already! e4e's fundamental premise is just that. It is still in the nascent stages. In the next few years, you have to execute it to show that the concept is really viable.

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