Given the right market conditions a lot of people can make millions of dollars very quickly. The technology boom of the late 1990s is precisely proof of that. That doesn’t change the fact that in any market conditions, creating enduring companies is infinitely harder than just making money.
This distinction couldn’t be more relevant in the Indian entrepreneurial community. During the late 1990s many (not all) of the big hits scored by Indian tech entrepreneurs came either from acquisitions or exits on the public markets that didn’t translate into sustained shareholder value. In other words, entrepreneurs (the lucky ones) got in and got out, driven by a VC-centric way of thinking at the time that valued short term returns over lasting value. With that all far behind, has there been a shift in thinking among tech entrepreneurs?
A look at the real legends of the technology industry reveals an oft-mentioned fact: Almost all of the greatest companies are run in large measure by their original founders. Microsoft, Siebel, Oracle, Dell, Apple, and so on remain the cornerstones of the technology industry, and all still feature their iconic founders at the helm. So what does that say about the stereotype that entrepreneurs don’t make good CEOs? What kind of entrepreneurs are we talking about here?
Attitude Adjustment“There is no birthright. But if there is a founder who can scale, such companies, in my opinion, tend to be longer lasting,” says Subrah Iyar, CEO of web-conferencing company WebEx. Nav Sooch, CEO of fabless semiconductor company Silicon Labs agrees with Iyar. “There is a stereotype that entrepreneurs are not necessarily great public company CEOs,” he says. “That can apply, but if you look at these great companies you find entrepreneurs running them.”
Many entrepreneurs say they admire Bill Gates and Larry Ellison, but with Iyar, it seems to really mean something. “That’s the class of people I admire,” he says. And it’s not their money he’s really talking about. “Those guys are unmanageable,” he says —something to aspire to?
Both Sooch and Iyar are still CEOs of companies that they founded and grew in the heady days of the mid 1990s. The two have different styles and personas, and some differences in their management philosophies. But both were first time entrepreneurs, and both have reaped enviable wealth from their individual companies. Neither looks like he will be retiring to Hawaii any time soon, however. Perhaps most importantly, of the Indian-founded companies that went public over the last three years, WebEx and Silicon Labs are among the top performers — their stocks down to realistic but respectable levels from IPO highs. And it seems to have a lot to do with the attitude of their founder-CEOs.
“When I met young entrepreneurs during the boom times, the stripes they carried where ‘I got funded by so and so VC,’ and that for me was very strange — most saw it as ‘I got funded now I’m done,’” says Iyar. “They would think ‘If I can’t do it they’ll bring someone in that can and that’s it I made my money.’