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December - 2013 - issue > Entrepreneur's Corner

Morphing: 4KTA

Naveen Bisht
Board Member and Chair, Programs-TiE Silicon Valley
Sunday, December 8, 2013
Naveen Bisht
This month's article brings you lessons from Raj Parekh, an extraordinary entrepreneur, prolific angel investor, intrapreneur and co-founder of several companies. Raj is currently President and CEO of CloudVolumes, a virtualization and cloud computing company. Previously, he co-founded Virident Systems, storage class memory with highest performance Flash company in 2006 and managed as CEO/Chairman till 2012; co-founded and managing Redwood Venture Partners since 1998, a venture capital firm located in Silicon Valley and Comstaller ($150M hi-tech incubator) in 2000. Redwood and its affiliated partnerships have raised funds representing over $250 million in invested capital in over 30 high tech companies. Raj has served as Board Member or as Chairman of the Board of over 15 high tech companies, including Magma (now Synopsis), Niksun, Pranalytica, eGtran, Virident, CloudVolumes, TiE Angels, PubNub and Aspex. Raj was member of the senior business and technology executive teams of several high technology companies known for his leadership and vision. He served at Sun Microsystems (now Oracle) as CTO and Executive Vice President of Engineering of all system products, and as VP and General Manager of Java Products for Sun Microsystems Microelectronics. Before joining Sun, Raj was Vice President and General Manager with Silicon Graphics Inc. (SGI) managed all chip development including "Geometry Engine" and several system products. With special gratitude to him, here are four key take away (4KTA) points, which center around the concept of morphing based on my discussions with him recently. Morphing is a special effect in motion pictures and animations that changes (or morphs) one image into another through a seamless transition. Similarly, creating success out of any entrepreneurial project entails morphing your company and yourself from one stage to next stage.

1. Continuous Learning – This concept of morphing occurred to me while working in various engineering roles in early stages of my career. I started my career in semiconductor process field making essentially resistivity, thickness and threshold parameters. Realizing early on that design engineers were not taking full advantage of my work, I morphed myself into designing integrated circuits. After some time, I decided to morph myself into a hardware engineer to ensure that system engineers took full advantage of the capabilities that I designed. Subsequently, I morphed myself into systems engineering role, than networking and storage and now cloud. This is continuous morphing of oneself to bring out the best solution instead of micro-optimization into any one particular product area.

2. Morphing Ideas and Products – Quite often, good engineering folks, when promoted into management roles turn out to be bad managers as they are unable to morph fully into what they are expected to do. Instead, they continue to act like super engineers rather than acting like a leader. For instance, as people get promoted higher and higher into an organization, it is easy to become arrogant whereas higher and higher you climb the ladder, humbler and humbler you need to become since you know less and need to manage more and more. For example, at Silicon Graphics, initially we started out with building graphics terminals and realized quickly that we needed to morph ourselves into a fully functional graphics workstation solutions provider. We realized that it is time to morph not only product but also engineering team. I had an opportunity to witness amazing transition; even today most of the employees will tell you SGI was the best company they worked for.

3. People Morphing – Typically a startup CEO is not the best IPO or big exit CEO, and so are VP of engineering and marketing and sales and more. Do not assume every one will be able to morph to next level. Identifying who does and who does not; when to make a change; replace or re-assign, while still keeping core team in place is critical. To accomplish people morphing, the best solution I found was to have few good advisors, not one who got lucky but one who had success in good time and bad since they themselves had morphed. Next, you need to manage conflicts. On one hand, you really want to believe in your product and your direction. On the other hand, you need to adapt to a changing market condition. There needs to be fine balance between being flexible and being focused at the same time. Nine out of ten times, you need to remain focused on what you are doing and your eyes need to be open for one opportunity that could morph you to a higher level. As an entrepreneur, you also need to be intellectually honest about when to call it quits or transition into a different and perhaps, even smaller role or even step down for the benefit of the company. For instance, one of our companies had an opportunity to go public at $900 Million market capitalization. The CEO was adamant on getting $1 Billion dollar market cap. The market suddenly changed in 2001 forcing the company to file for bankruptcy. The key take away is to morph yourself into being flexible and assessing an exit opportunity rapidly and grab it if it represents a fair value.

4. Expecting the Unexpected – Every entrepreneur needs to be ready to expect the unexpected regardless of all the market analysis and customer validation. For instance, Virident system was founded to solve significantly improve search, caching and analysis and decided to use special kind of flash memory from a multi-billion dollar public company instead of generic flash. We made them as our partner, got over $10 Million investment from them. Additionally they invested $50 Million in their fab for us while we successfully developed and deployed the product. Customer list was fantastic; it felt like we were on top of the world! Unfortunately, the strategic partner filed for bankruptcy. Great product, perfect market, POs in hand, team in place but overnight no place to go, no product to sell, no cash in the bank, lots of bills to pay and nothing but sleepless nights for me as CEO. Fortunately, we successfully morphed the company into a storage-class memory company and recently, exited the company for over $680 Million. The key take away is that expect unexpected just in case everything you count on somehow does not work.
In summary, the four key take away points for entrepreneurs are continuous learning, morphing ideas and products, people morphing, and being ready for expecting the unexpected.
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