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Vivek Wadhwa:
"Indians Succeed Because They Know
How to Compete With Millions"

 

By Kavita Chhibber

 

 

The first thing you notice about tech guru Vivek Wadhwa is that he says it like it is-never mind if it jolts his techie counterparts from their prim and propah seats. His journey from computers to celluloid has been anything but staid and he could very well bring his own life story to the silver screen for all the dizzying twists and turns, glitz and glitches that he has had to encounter.

 

In an exclusive interview with Kavita Chhibber, Vivek talks candidly about a life touched and tarnished by technology, the bungles of Bollywood and why he is worried about the future of America.

 

So what are the memories of childhood?

 

Well I was born in India but my father was a diplomat, so I lived more in other countries like Indonesia, Australia and so on. I think it gave me a much broader perspective of life, so when I meet my fellow Indians I don’t get bogged down by which state they are from, what language they speak what food they eat. It’s a pity but Indians really discriminate against each other all the time and then are the first to complain about discrimination.

 

I was taught the basic Indian values of morality, integrity and the importance of education. Of course like all Indian parents they expected me to become and engineer or a doctor. I opted for engineering in spite of being clueless about what it was, and did computer science. I went to school in Australia.

 

Every one who visits Australia seems to fall in love with it.

 

 Yes it is a beautiful country. However in the 1970s when I was in college there Australia had a “Whites Only” policy and until 1974 you could not get immigration unless you had white skin. So while the Australians weren’t racists, they just couldn’t understand foreigners. I was always different, always isolated and never able to assimilate. I always had to fight to succeed, to make my presence felt.

In fact it was interesting that when I was leaving Australia to come to the US, the President of this private company that I was working for banged his hand hard on the table and said-“Well one day you will end up as a VP for GM. Is that what you want?” I said, “Absolutely I have the ambition.” The fact that a foreigner could have that kind of ambition totally surprised him!” That is how the Australian mindset was in those days. As it is, it took them some time to accept the fact that I was a “successful” foreigner, and that too in corporate Australia or that I wanted to rise even further beyond that!

I did go back after my marriage so that my wife could see if she wanted to settle down there, but the pace was so slow for her that she said Vivek, its either Australia or me!

 

So America must have been a whole new experience.

 

It was. America is all about the American dream, about succeeding and that is why Indians who come here assimilate very well. It is the perfect marriage of the Indian-American mindset. In India you are always competing against millions of people, you have to fight for everything be it government corruption, or bureaucracy or the many obstacles society puts before you and tells you why you can’t do this or that. So Indians are used to battling their way through life. Now put that same person in the fertile soil here, remove the shackles and he will start thriving.

I came to New York in 1980 and couldn’t believe how fast things moved here, how ambitious and driven people were and how hard they worked. I felt like a village boy in a big city but I became part of the New York culture very quickly. I worked for Xerox and then for the investment bank CS First Boston.

 

First Boston was the epitome of a ruthless culture where if you delivered you got paid a lot. You work 70-80 sometimes 90 hours in a week and make a huge salary. I learnt how to succeed at First Boston and became VP Information services. Then I developed a revolutionary technology for building large-scale client/server systems and IBM funded a new company based on that technology. I became Executive VP and CTO.

 

 Entrepreneurship is a totally different game from working in the safety net of a big corporation. I had to learn to sell and market myself.  While you are not tied down or answerable to anyone, everything you learn or do or mess up is your responsibility. So out went the big salary, big bonuses and first class travel because you have to set an example for the rest of the team. I had no idea what I was getting into because I had not been an entrepreneur before. So you are now not battling other departments within the company but ruthless competitors outside and your survival depends on clinching the deals everyone else is angling for.

The number one thing I had to learn was the art of selling, of convincing people to believe in my vision ad buy the product. I had an advantage that I was the number 2 guy and learnt a lot from the number 1 guy. In 5 years the company grew to 120 million and we did a spectacular IPO.

 

Did success go to your head?

 

Absolutely. You begin to think you are invincible-you are this big techno star being quoted all over the press, you are giving keynote lectures all over the place. And then of course life puts you in your place. The IPO and the company ran into trouble. It is humbling to see what happens when you are no longer their star performer and when things go wrong. You go from being the IPO superstar to someone who missed his numbers and the whole world turns on you. It was difficult but it taught me many good lessons. It got me out of the mode of being arrogant and full of myself.

I started my second company in 1997 and that too did very well and again I was all over the media, but then the dot.com bubble burst and we too were caught in the fray. I worked very hard, invested my own money and got my managers to invest. I had to lay off people but even they came to work for me for free, something that made headlines in the local newspapers. They believed so much in the company and my vision they said we don’t have a job so we might as well help you

I turned the company around. Then 9/11 happened. We recovered from that and for the first quarter of 2002 we were looking at 200 percent growth with 24 percent profit which was unheard of in tech companies.

 

And then something happened which is straight out of any Hollywood or Bollywood movie.

 

 I had burnt myself out and decided to go on a cruise with my family. There I felt some chest pains and thought I had strained myself lifting weights. I had always worked out and was very fit. The pain went on for four days and I kept ignoring it. When we arrived back, the pain was such that my left arm had gone numb. My wife insisted on sending me to the hospital. There we found out that I was having a massive heart attack. Had I arrived even two hours later I might not have made it. So here I was in the ICU, trying to recover and unknown to me there were these VCs planning to renegotiate the terms of the current financing. Two days later and still bandaged, I left the hospital and walked, uninvited, into a closed-door meeting, where investors were trying for a revised agreement that would give them majority ownership. Earlier the younger brother of one of the VCs had come to visit me in the hospital. I found out later that he had designs to become the CEO of the company.

 

That began a battle and lawsuits which resulted in having them thrown off the board and I made them invest all the money they would have invested and took control of the company.

I should have been taking it easy but here I was fighting epic battles with these influential VCs. I was utterly exhausted but it was my wife who has always stood by me, who gave me the strength to fight. She said, “Vivek if you give up now you may survive this heart attack and this take over, but you will live in a state of terrible unhappiness and that won’t be much of a life. We didn’t start this. These people have wronged us. You must fight this fight.” She worked twice as hard as I did invested more of our savings and won.

 

I think it was very sad to see this level of dishonesty from people I once respected. A lot of people try to take advantage of the fact that Indians by nature don’t like confrontations and are also not savvy enough in general to take advantage of the legal system. We don’t like to be talked about or look bad in public and these guys thought I would be like all those other Indian entrepreneurs. At one time these investors had a team of 19 top lawyers against my one; they had spent over a million dollars in legal fees and thought they would wipe me out. Well at the end they raised their hands and said Okay what do you want?

After that I decided to take it easy and just recoup from this ordeal.

 

And then Bollywood came a calling!

 

Life works in strange ways. My son Vineet who is born and totally brought up in America decided he wanted to know more about India and went off to do one semester there. He was staying in Delhi with his grandparents and picked up some modeling assignments, in Delhi of all the places. None of us are avid Bollywood film watchers. I have been in a time warp where my movie knowledge was frozen in the 70s with Amitabh Bachchan, Feroz Khan and so on and I thought most movies of the 70s were atrocious. Recently however Vineet had started bringing Indian film DVDs borrowed from his friends. I saw that some of the recent movies were pretty good both technically and in the subjects that they were dealing with so we started watching some again.

 

Then I decided to spend some time in Delhi with my son to make up for the time I had been working round the clock. He says to me-Dad you are famous and every one knows you-so I’m sure you know all the Bollywood stars. I want to meet some”. He also decided he wanted to be a Bollywood actor!. I was quite stumped. I was well known in the hi-tech world-I could have got him to meet Bill Gates, but film stars? I was totally clueless. None of my techie friends knew any movie stars either.

 

Then I remembered this guy who had asked me to put together  a business plan for him and had mentioned that he was married to an Indian actress. I called him and asked him to introduce us to an Indian film star-any star since we were clueless anyways. His wife was not in Bombay at that time, but he had us hooked up with actor Feroz Khan. Feroz Khan was very gracious. He called me and told me he knew who I was, and that he would send his car at seven to get us. I was quite stunned and for a moment Vineet and I thought it was a hoax. Vineet said, C’mon dad-can you imagine Feroz Khan calling you? Still we were down in the hotel lobby at 6.45 p.m. in anticipation and sure enough his silver Mercedes that everyone recognized pulled up at 7. He is one of the classiest people in Bollywood, and a wonderful host. He showed us around his palatial house, cooked for us and said sorry my son ( actor and teen heart throb Fardeen Khan) was going to come from Delhi to meet you but his flight got delayed, so I have invited Celina Jaitly. We were totally clueless as to who she was. He told us she was Miss India 2001 and now acting in his film Janasheen. Celina came over and went out of her way to be nice to both my son and I. For her it was enough that Feroz was cooking for us so we must be someone important.

 

I caught the Bollywood bug right then and there and when I got back I spoke to the guy who was planning to make the film My Bollywood Bride. I got involved with the film, helping him market the idea, and get finance. For a while I was like a kid in a candy store, but soon I started seeing the downside of Bollywood.

 

Dr. Jag Mundhra told me that they try to fleece NRIs there thinking they have a lot of money to throw away and he had faced a tough time, when he came from USA to shoot his first film in Bombay.

 

Dr Mundhra was absolutely right. People hiked up their fees and tried to rip us off. There are a few classy people but a lot of it is trailer trash. The moment it was discovered that I was involved in the film I was flooded with emails from budding actors and actresses with head shots and other kinds of shots. At Bollywood parties all these beautiful women would come on to you when they found out you were a producer, and many made it clear they were willing to do anything to make it. It was also interesting that while we are enamored of movie stars, they are enamored of technocrats. Many of the young actors are well educated and very tech savvy.

 

I discovered though that movie actors are very insecure people. They are always looking at numbers, validation and worried about their rankings, their next offer. They have very little freedom to do what they want. They are always suspicious because a lot of people who try to befriend them have ulterior motives. It’s a cut throat world.

When we started Bollywood Bride our budget was 500,000 dollars. It’s now getting closer to 2 million as we are trying to release it. It has done very well in a lot of festivals where it has been shown.

I think the entertainment industry be it  Bollywood or Hollywood, is very crooked and fake and I will go on record to say that. However if we can bring in some integrity into it, it can be a great place, but it really needs to be cleaned up.

 

Hollywood and Bollywood have a lot in common. Hollywood of course is years ahead in terms of professionalism and infrastructure than Bollywood but they are catching up. I’m getting involved in a Hollywood project that was presented to me. It’s a pretty solid plan and many top notch Hollywood actors are really excited about working in a Bollywood film, so we are roping in some top mainstream Hollywood stars.

 

So when you look at your life so far what stands out and what is in the works today?

 

Well I have been a Techie all my life and what has surprised me is that I’m involved with Bollywood and Hollywood now. I could not have ever imagined it, but ninety fiver percent of my time since the past one and a half years has been spent at Duke University doing research. I’m doing it  to give back to the community and meeting some very bright minds has been very rewarding. We have published papers that have made a huge impact nationally and internationally, and have been read by top notch politicians, economic advisors and people who can influence major decisions.

 

If we don’t watch out, very soon it will be easier for a gardener to get immigration than a rocket scientist. It’s really important to support skilled immigrants, because 25 percent of all technology companies have either a CEO or a CTO who happens to be an immigrant. Twenty five percent of founders of tech companies are Indians which is a huge number considering we are less than 1 percent of the population. Almost 6-7 percent of all tech companies started in the US are by Indians and the revenue runs into billions of dollars.

 

I think my main concern these days is the future of America. I worry that America will lose its competitive edge to the world because of research being outsourced. I’m looking at what the US can do to prevent that.  I’m at Duke for the next one year and I am right now focusing on doing some more solid research and also taking it easy and becoming healthy again.

 


Adventure in a cup: Coke warms up 
By Babs Sachdeva and Ibn Newsome

Good Morning on the jolt; leave it to the finest global brand company, Coca Cola, to add a dimension of “exotic” to an everyday concept in the world. As the world wakes up, everywhere, the drink that necks up right after water is “coffee”. Some may call it “Chai”; others “Qawah” while others may just submit to it as the necessitous nectar of the morning god without which getting started with the day would be near impossible. Cashing in first on the popularity of the beverage was Starbucks and with over 12000 stores worldwide, it pretty much validated the market and remains ahead of Caribou (#2) with a wide gap (Caribou has about 500 stores and mostly concentrates on the domestic market). But, as everyone knows, while we all crave that cup and automatically drift towards the neighborhood Starbucks, we are also looking at our watches and praying that it doesn’t take the customary 10 minutes in the store. Well, the insightful market research teams at Coca Cola were quietly observing the first-mover as it continued to establish our taste and are now ready to cash in on the one thing that may eventually leave Starbucks behind; a great cup of coffee in 10 seconds!

At approximately 400 cups a day in the trendy Yorkville store in Toronto, the Far Coast Coffee brand concept store by Coca Cola has exceeded company expectations. While the blind taste tests preceding the actual launch showed a 70-30 preference to the new brand, Coca Cola wasn’t taking any chances when it designed its rolling thunder roll-out of the Far Coast Coffee brand; a 4000 square-foot concept coffee store which will establish the taste preference for Far Coast Coffee before we start looking for it in upscale restaurants world-wide. While the premium brewed beverage targets the same market as Starbucks serves, Ibn Newsome, an executive with Coca-Cola’s global branding team will tell you that they are not competing with Starbucks or any other coffee chain. “We are not in the business of running coffee houses; we want to provide a faster alternative through our new pod technology which gets you a superior coffee blend in seconds”. And, if you know Coca Cola, you know that the company just makes syrup for its drinks, which it then provides to the bottling companies who do their magic and distribute it. Coca Cola has mastered the art of providing the most core ingredient and leaving the details of bottling and distribution to its tie-ins while it pro-actively and aggressively markets and sustains the demand for its products. In fact, that’s exactly how one can look at these concept stores; an investment in branding of their premium beverage product. As the dynamics of the industry and consumer consumption of information have changed, Coca Cola must think that for a beverage to succeed, they must provide the proof of the pudding, so to speak instead of an advertisement on TV or your local grocery store. The unique hub and spoke idea of planting a store as their main advertising vehicle, in the midst of where their target segment spends their day is a departure from how Coca Cola usually launches something, but the long term plan clearly aligns with their well-known we’ll provide the technology; you do the rest philosophy.

It’s brilliant if you look at it closely! You get to sustain your core competence at the operational level as you enter a totally different need space (hot beverages as opposed to the refreshing cold drink) and go after a totally different part of the day in the consumer’s life. Coca Cola also seems to have realized that beverages such as coffee and tea have a market three times larger than carbonated drinks and will offer several different flavors of coffee and tea under the Far Coast label. Extensive research determined what the Chinese restaurants have known for decades; take four ingredients and create 180 dishes out of the combinations. The pods which are basically the size of a hockey puck use four indices to create the perfect cup of coffee: the bean source, the blend choice between cappuccino, espresso o straight coffee, the flavor shot and the milk type. A well-stocked Condiments section provides an avenue to personally customize our own preferences. I guess they realize that when some Barista is making our coffee we look at the clock but we will spend any amount of time getting the sugar right, on our own. And they did not leave out those of us who go to the QSR (QuickServe) or C&P (Convenience and Petro) places to grab our coffee. Anticipating that offering Far Coast Coffee at the gas station might diminish the quality perception, they are rolling out “Chaqwa” (chai+qawah) at gas stations and movie theatres. In fact, in Toronto, it is already available at Silver City Richmond Hill and the Village Market in Port Credit.

So why roll it out in Toronto (Sep 2006), Singapore (Nov 2006) and Oslo (this week; Feb 2007) first? Because the per capita consumption of coffee in these places is very high. Could it have anything to do with the fact that Starbucks doesn’t have much of a presence here? Ibn tells us that the real reason is localized barriers to entry. The Far Coast Coffee does not emphasize the Coca Cola brand precisely for this reason. It offers an exotic experience, as opposed to Starbucks’ Americana in a cup. The stores are localized according to customer taste; for example the Singapore store sells a variety of food as well because locals like to get coffee and food together. So, one wonders if Starbucks customizing its look in its Chicago stores right after the Far Coast Coffee store started, is coincidental. May be. Maybe not!

Writer’s Note: Coca Cola™ and Coke™ are registered trademarks of the Coca Cola Company. The illustration in the article was done by the writer for this article and is not part of Coca Cola’s proprietary information and may not be reproduced without permission. Many thanks to Ibn Newsome for his insight on the Far Coast brand.

Babs Sachdeva is Founder/Chief Executive Officer of SCS, LLC which provides consulting services in growth and exit strategies for start-ups and small companies. She was also most recently Chief Strategy Officer for RAMSAFE Technologies, Inc. where she raised several million dollars in Series A Funding for the company acting as its interim CEO. She has 10+ years of experience as a Consultant to the C-suite in the High tech industry having founded and managed three corporations in her career.

Ms. Sachdeva started her career by founding a fashion design company at the age of 17 and has founded two other businesses since. Ms. Sachdeva has worked as an Executive Management Consultant since 1997 helping her 20+ clients as business and technology strategist as well as advising them on Acquisition and Growth strategies in the global marketplace. Her assignments have brought her extensive exposure to American, European and the Indian markets specifically in the Homeland Security industry, Telecom and High Tech Financial Institutions spanning hedge funds, banks, and venture capital.

Ms. Sachdeva has a Master’s degree from Virginia Tech, and has studied international and corporate law at the university level. She writes and speaks often on start-up issues and Homeland Security issues. She confesses that “she loves to come up with a growth strategy for those who seem to have come to a standstill or exhausted their options”. Ms Sachdeva works globally and is a resident of Atlanta, Georgia.

Outside of work, Ms Sachdeva loves the theatre, is an Actor, Singer and Director and enjoys travel, writing and fusion-cooking.

Babs was featured in February 2006 Community Profile.

Disclaimer: The views and opinions expressed in these columns are solely those of the writers and do not necessarily represent those of the editor/publisher.

 


 

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