It’s a pivotal period for CEO Raj Jaswa. He took his startup from nothing to a multibillion-dollar market cap. The Web-based system Selectica built for BMW to allow potential customers to configure a virtual car on the Web now has 80 percent of people who buy BMW cars configuring a car before they purchase one. $20 billion worth of Cisco Systems’ orders go through Selectica systems every year. It’s a compelling set of products.
But, Jaswa reflects, “It’s a frustrating time. You know you’ve got it: your solution is ready, your technology is working beautifully, your first strategic customers are happy. So why isn’t everybody beating a path to your door?”
The answer is clear, and Jaswa points it out himself. Myriad potential clients that could use Selectica systems to bring their operations more in line with what industry leaders like Dell and Cisco have built are currently struggling with so many financial, HR, sales and investor problems that they just don’t have the time or the budget for a Selectica sales pitch.
“There was a time when the Internet sold us,” Jaswa explains. “Now nobody is asking, ‘Hey I want to move my business onto the Internet.’” Despite its key client references, Selectica’s sales are down more than 20 percent from last year against predictions of a doubling, and Jaswa has felt the crunch. The tougher environment seems to have affected him on a very personal level, and brought him his most significant test as an entrepreneur.
“It’s very hard to suddenly not have your phone ring 50 times a day,” he says. “There was a time when this was like a madhouse. The building was bursting at its sides. Everybody was running and chasing. To suddenly not have the phone ring could get you really upset. You feel unwanted or unneeded.” These are surprisingly emotional words for the CEO of a public company.
The company had to reduce its headcount by 30 percent in April. “It felt like we were tearing out the heart of the company. But we had to do it,” he says. The market demands have shifted from technology to business, and Selectica, built as a technology play, will have to totally re-think the way it operates. Some of the same people whom Jaswa struggled to bring on board during the boom had to be told they weren’t needed anymore. And he seems heartbroken at the thought.
But Jaswa is one of the lucky few. He was one of the tens of entrepreneurs who saw the Internet as a bag of opportunities, some real and some fanciful. Some escaped — took their companies public or sold them off in time. Others were not so lucky — and their hard work and money went down with the Nasdaq. But they all lived a dream. From hallowed white-walled research labs, there emerged a new class of Indian — who, with a few spectacularly successful predecessors, took the leap of faith — and became entrepreneurs. For a time, this was the epitome of the siliconindian, one that the mainstream media, when discovering its force, called “The Indian Mafia.” The survivors, like Jaswa, continue their struggle.
Of course, Jaswa profited from the hype. Selectica stock went up over $100 and is now down around $5. The industry-wide meltdown has led some to characterize entrepreneurs who took advantage of the Internet boom to generate wealth as greedy opportunists who made their money and then got out when the going got tough. It’s not an entirely inaccurate picture.
But Jaswa isn’t really in that camp, and that may be why Selectica is still in the hunt to become a serious software player. Meeting him it is evident that he is passionate about his company’s wellbeing. His voice takes on a new energy — more personal than corporate — when he outlines a multi-tier plan to reposition the company, including changing the product line from a platform to a suite of vertical applications and trying to forge relationships that will raise the corporate image.
Sales will now be conducted in a new way, he explains. “It used to be, ‘Who can do the best demo faster than anyone else?’ Now a CFO will throw you out of the room if you start showing a demo.” For Jaswa, the Internet is still very much a part of what will change business in the coming years, even if the Internet itself is no longer what people are buying.
In some sense Jaswa, who started his career at Intel in marketing in 1980, has achieved success as an entrepreneur. But what is clear is that he doesn’t exactly see it that way right now. The exit strategy is behind him and now he’s laboring to steer a struggling company. In the software business lasting success takes more time than a quick ramp up and a lucrative exit.
Jaswa is philosophical about the state of technology entrepreneurship, and he suddenly becomes optimistic after a lot of frank discussion of the tough times. In his eyes the “me too” technology of the last several years killed a lot of innovation. The new rules signal a fresh opportunity.
He jokes that the slowdown “didn’t sink in; it hit you over the head with a hammer.” Jaswa makes no claims that he saw it coming. But it’s reassuring to see an entrepreneur, after a successful exit, look to the next challenging phase of growth and be willing to start all over again with the same company — out of passion for what he built. The next phase promises to be as much a struggle against the odds as the original startup experience.
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