Gururaj Deshpande
“I am beginning to see it in ideas such as the Akshaya Patra. These guys are looking at very unique problems and are getting recognition for solving these problems better than anyone else. — Gururaj Deshpande, technology entrepreneur, investor and philanthropist, once counted amongst the world’s richest Indians.”
IN CONVERSATION: Interview with Gururaj Deshpande, Founder of Tejas Networks, Angel Investor and Philanthropist, Economic Times, Bangalore Edition, Mon 14th June 2010, Page 8.
..In the product business, it is about anticipating… you need the knack to anticipate the market, put your money behind the idea and develop that market in the initial stages..
INDIA’S biggest export can be hope,” says Gururaj Deshpande, technology entrepreneur, investor and philanthropist, once counted amongst the world’s richest Indians. The Boston-based technocrat has a portfolio of six technology companies and two major non-profit initiatives that he oversees . In India, Deshpande mentors Tejas Networks, the optical networking company he founded nearly a decade ago.
Last fortnight the Bangalore-based firm acquired Ethios Networks, the first ever acquisition by an Indian firm of an Israeli high technology company in a cashless transaction that will see an integration of the workforces of the two companies. In conversation with ET’s Archana Rai, he explains why he divides his time between helming for-profit businesses in telecom and new energy and also leading strategic philanthropic initiatives at the Deshpande Centre for Technological Innovation at MIT in Boston and the Deshpande Centre for Social Entrepreneurship in Hubli, India. Edited ex
cerpts:
You built a product company Tejas Networks at a time when India is still largely regarded as a region for technology services, what are the challenges you faced?
My background has always been that of a product entrepreneur. For products, first you need a local market, it is very hard to start a company in India and sell in the US and vice versa, telecom is hot in India and there are a lot of companies in Israel and the US, who want to build products there and sell in India, that is not possible. Having a local market is a very important piece of building a product company and India now has a local market. The second thing is ability to take that gamble to bet on an idea.
Services business is a cost play. Somebody gives you a project you deliver and then the returns minus cost is your profit. In the product business, it is about anticipating, you put your money on the table and you don’t really know, you need so many other skills, the ability to read the market, get in touch with the customer its also not about going out there and asking the customer what he wants – because that won’t get you there, it is too incremental. So you need the knack to anticipate the market put your money behind the idea and develop that market in the initial stages.
Did such a market exist for Tejas Networks ?
No, we didn’t have a market but I could see one, the domestic market for telecom was huge all the global big players were there it was a fiercely contested place and in some ways it is good to pick a market like that, if you can survive in this market then you know you have something there to be able to survive globally .
So, what are the big challenges for Indian product entrepreneurs, are there enough of them thinking on these lines ?
Oh yes! a whole bunch of them. But India has to think about it differently, about innovation and new ideas to make this a better world. We have been working on this for a long time. At MIT we started a centre in MIT called the Deshpande Centre for Technology Innovation, the idea is to see that all innovation is relevant if it has to have impact in the market.
The formula innovation plus relevance equal to impact, is a big part of everything I do now. If India can pick problems that are relevant to India and then become relevant to the world you already have scale, everything is huge. The other thing is low affordability everything has to be cost effective. This is happening in all sectors in India entrepreneurs have to latch onto it, what they ought not to do, is make the mistake of trying to do a start-up like others are doing in Boston or in Silicon Valley, as in trying to change the iPhone, these are things that matter to .01 % of the Indian population.
Do you see such thinking here ?
I am beginning to see it in ideas such as the Akshaya Patra. These guys are looking at very unique problems and are getting recognition for solving these problems better than anyone else.
The next one is Agastya Foundation, it is really scaling up in teaching science to rural kids, 70,0000 kids this year and soon they will work with government to work with 7 million kids. This is huge. In the social entrepreneurship Sandbox in Hubli we have a programme where we get college students in teams of four to solve unique problems in technology energy, anything they find locally, we have 7,000 students. Soon it will go up to 10,000 students.
Education is a big thing. The system is broken but somehow the country is able to generate enough manpower to feed industry, there is a lot of innovation in the way companies train talent – they look for aptitude over skills, test somebody for Rs 1,000 – train them for Rs 20,000. That is an entrepreneurial opportunity in itself.
So how do you strike a balance between for-profit and non-profit ?
Well they are really not that different. An entrepreneur is trying to make it a better world. So maybe an IIT graduate is creating opportunities in technology and so on to make it a better world. So a Tejas or A123, (the Boston-based start-up makes lithiumion batteries to store renewable energy) each one is trying to make it a better world. So I don’t see a big difference between social entrepreneurship philosophy and for-profit. You need to build the execution excellence from the for-profit sector and bring the compassion of the non-profit to the for profit sector. The good thing is business is Darwinian in nature. In the non-profit people have a lot of compassion, but not much happens it is a very non-performing sector, the assets are all tied up. If you can bring in the Darwinian nature into the non-profit it will be magical.
Entrepreneurship is about multi-disciplinary things of combining a little bit from here and there to create an intersection where something new happens.
So is more such activity happening in the social enterprise space?
Maybe SKS Micro finance is an example where people will say we need two or three more such companies. But even building a for-profit business that provide new products and services for people who didn’t have it before is a great way to build a company and serve a social cause. In some cases there is a direct connection between the two, but in some cases it can be indirect like in telecom. Take Bharti or Reliance. This group as a whole has probably done some of the best social entrepreneurship you know bringing the mobile phone to the farmer. That would not have happened if they had given some charity money.
So do you see India as a leader in social entrepreneurship ?
I think India has the best opportunity, China doesn’t have the freedom. In India there are problems but also have there is 1% of the population that is not afraid of scale – when you say $1 billion, people aren’t afraid of big numbers. So if you combine these two things you have some thing big. In India the per capita income is a lot less than Pakistan and Palestine, but in India somehow people have hope. They may feel they have not done well but they see someone who perhaps gone to the middle east or come to Bangalore and done well. So they look and begin to feel their kid can do better. The hope these people have is their biggest asset and the biggest thing the world needs. Because when the population loses hope there is nothing left to do. How do you fight terrorism? If there is hope people won’t go and kill themselves. India’s biggest export can be hope.
There is a new office of social entrepreneurship being mooted by US president Obama, that is reported to be looking for inputs from India, will you work with them?
We are working very closely with them. Obama is now duplicating the Deshpande centre at other universities and is also thinking of duplicating the Hubli Sandbox. There is search for a new model of development and the thing about Sandbox is that it is all focused on local leadership. So its not about someone sitting in Boston thinking about a solution and dumping it here and that is the opportunity that India must not miss whether its for profit or non profit.
So which are five big ideas that you see India building leadership in ?
Energy definitely in generating distribution, back-up. In health care building some of the medical devices, telecom is very big and then in IT making the networks to make society better organised more efficient. And then in education, where India cannot catch up with brick and mortar education but must use technology.
What are the must have attributes for a successful entrepreneur ?
Naivete is very important part of entrepreneurship. You are taught how to do rational simple things but when it comes to bigger decisions in life, starting a company, getting married, buying a house having a kid all these things they are all irrational and its hard to make decisions because the unknown overwhelms the known. You never know what its like unless you’ve done it… That ability, that gut feeling to take that plunge is a very entrepreneurial thing.
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