VCs have become conservative as they recover from a serious reality check. But Dalal, managing partner at Mayfield, says, “Innovation is alive! I get inspired when I see a device like the iPod because it says you can be innovative and creative, even now.”
This enthusiasm for the core elements of the technology industry appears almost idealistic, and more genuine in Dalal than in many VCs. It may have something to do with his own technology resume, which reads like a history of modern computing. At 22, he came to the United States to study at Stanford, after undergraduate work at IIT Bombay.
He recalls the early ‘70s. “There was a computer in the basement at IIT Bombay. You could check it out from something like 10 p.m. until two a.m. It was a Russian model — a 37-bit computer, believe it or not. I learned to program it using machine code [clicking switches].” Even today, his enthusiasm for the element of discovery in early computing is apparent.
At Stanford, Dalal met Vint Cerf, a systems programming professor, who is now widely recognized as the creator of the Internet. Dalal became Cerf’s graduate student. “There was a fair amount of idealism,” he says. “People didn’t rush off and do their own companies; they actually did research and spent time working on it.”
From ’72 to ’74, Dalal and Cerf’s other students played with the possibilities of chat and e-mail on what was then called the Arpanet, the precursor to the Internet. In December 1974, Dalal, Cerf and Carl Sunshine drafted the first TCP/IP spec, called INWG 72 (Internet Working Group Document 72).
“When we were working on TCP, we knew that the world we have today [post Internet] was going to happen, says Dalal. “We didn’t know if it would be TCP, or something else.” In fact, the original spec that they drafted became the backbone of the Internet, and remains astoundingly accurate today.
But if working with Cerf was an amazing opportunity, Dalal met other innovators. Technology pioneer Bob Metcalf was on his thesis committee, and was starting a very innovative group at Xerox at the time. Metcalf invited Dalal on a tour of his facility, and the young Ph.D. saw laser printers, an Alto computer and much more. “If you saw an Alto, Ethernet or a laser printer in 1977, you wouldn’t want to go work anywhere else,” says Dalal. “It was just obvious that this is what was going to change the world. You saw a word processor with a mouse and fonts on it. You could see the future.”
The group would go on to develop the two-button mouse, icons and many more of the conventions of today’s Windows workstation, as well as Ethernet. Dalal’s car license plate became “10 MBPS” to celebrate the speed of Ethernet. Talk about living and breathing technology.
Dalal loves “Being associated with creativity — with people and entities that want to create change.” But VCs obviously have to be more than just idealists. Dalal got his entrepreneurial training as a founder of Claris with Bill Campbell, which he calls his “least technical” endeavor. There, he learned to market and sell products. And after Claris’ success selling software for the Macintosh, he found a lull in his career. “Your life and career take paths. It’s easy to follow everyone else, and yet the biggest opportunities come when you try to see the world differently,” says Dalal.
In 1991, he was asked by Mayfield to become an executive in residence and develop an investment thesis on software for the fund. Windows 3.0 was just emerging, and Dalal’s mission was to envision enterprise productivity software businesses based on Windows. The result of Dalal’s early thinking is Mayfield investments like Citrix, BroadVision and many more.
“I didn’t plan to be a VC; it’s just one of those things that happened because I took the chance to hang out here,” says Dalal. When asked about the recent flameout in the VC world, he returns to the basics. “Innovation and venture capital and entrepreneurship will continue. That’s the very nature of the creative spirit.” He admits, though, that recently “entrepreneurship became a glamour sport.”
Dalal is conscious of the power of the Indian network of entrepreneurs in America, but he doesn’t overplay it. “I’m not part of the ‘Indian Mafia,’” he says, “because we’re VCs who finance everything. But I’m sympathetic to a company that has Indian entrepreneurs in it, because I know that most Indian entrepreneurs are well educated; they’re very hard working and want to be successful — all of the attributes that lead to hanging through tough times to make a startup work.” He adds, “The goal isn’t so much to create an exclusive network by which we can invest our money, but to allow Indians to feel empowered to go and be entrepreneurs.”
Dalal hasn’t lost the passion for change and innovation that made his career. He lives what he calls an “Internet lifestyle,” meaning that his home is filled with the latest gadgets and digital toys. He stresses how important it is for a VC to be a consumer of technology. He also stays in touch with research at institutions like Stanford and Berkeley.
Spending an hour with Yogen Dalal is enough to realize that he isn’t really a deal maker — a financial guy with a transaction-oriented mindset. He’s somewhat of a dreamer with his feet on the ground, enthusiastic about the technology with which he surrounds himself. “As VCs, we’re willing to lose all of the money we put into a particular deal,” says Dalal. “I’m willing to take the risk.”
Like the risk thousands of fresh Indian engineering graduates over the decades have taken — coming to the United States with a pair of kurta-pajamas, black pants and a blue shirt in a broken suitcase, and the now legendary $20 in the pocket. What were they chasing? Typically, a master’s degree and a few years of work experience before returning to the homeland. A few years turn into decades, priorities change, motivations adapt to the environment.
Dalal reflects, “When I came here I didn’t know what to expect. That’s probably one of the most important lessons in life: you can start with nothing except a great education, and with a bunch of luck you can make your life come out. I would look back and say I didn’t have a grand plan, but each dot that I connected next was because I was passionate about it.” si
