Interview with Mr. Manoj Saxena
We at CEL recently had the opportunity to catch up with Mr. Manoj Saxena who is a tech entrepreneur and the founder of the Saxena Foundation. Mr. Saxena is an alumnus of BITS Pilani and is currently a senior executive at IBM in the US. He did his MMS in Industrial Engineering from BITS and graduated in 1986. The Saxena foundation recently setup the Saxena Pre-seed fund for student entrepreneurs aimed at fostering entrepreneurship in BITS Pilani campuses. It was a very inspiring talk by Mr. Saxena who told us about the various facets of his career as an entrepreneur. He also talked to us about the goals of the Saxena Foundation and the impetus he intends to provide budding tech entrepreneurs coming out BITS and other Indian schools.
Read on for the full transcript of the interview.
1. Let's start from the beginning. 1982 MMS Industrial Engineering in Pilani. So, what are your most memorable moments in Pilani? Any hangout spots, activities, Oasis? During Oasis?
Oasis is right up there. I was very active in the Photography club and ran the Photography team during my last year at BITS. So I have a lot my Pilani memories captured through the lens. Our major hangout spots used to be spending time with friends at Skylab, C'Not and NC. Activity wise, I was a very enthusiastic Squash player (although not very talented) and have great memories of cycling to the old squash court building with my friend Ratnesh.
2. So Post Pilani?
After Pilani, I was hired by Bharat Gears in Mumbai as Executive Assistant to the CEO. However, I had to move to Hyderabad after a few months because my father suddenly passed away. I was hired by ITC as a management trainee and I worked for ITC Bhadrachalam for 2 years following which I went in for my MBA in the United States.
3. How was the Michigan State University MBA experience?
It was exceptional experience. It provided me with great management training and also a foundation for understanding professional life in the United States. On the academic front, learning business through a case based approach was very rewarding. The case based method was not something we did as extensively in Pilani as we did at Michigan State and was quite revealing. In addition, I met and made friends with people from various backgrounds and countries as we worked together on a case. This whole experience was very interesting and rigorous.
In addition, Michigan State provided me with some very important lifeskills. For example, Michigan State Business School didn't offer scholarships to MBAs. As an international graduate student, I could have done what the majority did – take a job at the residence hall and any local café. However, my focus was to take a job that added to my skill and depth to my resume upon graduation. This led me to holding three part time jobs on campus and through it I learned skills such as mainframe and database programming as well as real-life exposure to Accounting and Finance processes. They also taught me critical skills such as time management and gave me my first exposure into the workings of business within the US and have served me well till date. All of these skills helped me differentiate during career fair and subsequently get hired by 3M.
4. So from then on, you got hired by 3M and worked there for 8 years if I am not wrong?
Right. So I got hired by 3M in a management program. Every year 3M hires 3-4 MBAs from schools across the US and groom them for future leadership positions. The hired trainees are rotated through various business functions as well as industry and product operating units. It gave you a real close look at the entire process of invention and commercialization. I was in the program for 4 years and subsequently moved to 3M in Austin to run telecom business unit. I had a rewarding career at 3M and learned a lot. It was like drinking from a fire hose and was a thrill to be recognized along the way by way of 7 promotions I received in my 8 year career at 3M.
5. So how did Exterprise, your first startup happen? How in the middle of a comfortable corporate career did you suddenly decide to startup?
Well it was a couple of things. First, given my experience at 3M around innovation, I got very fascinated by the whole process of coming up with ideas, validating them, and taking them to the market to scale those ideas and build businesses. 3M is really one of the world's best at innovation and getting that firsthand experience around the ideas to commercial solutions process at 3M was vital. I was an intrapreneur at 3M and I wanted to become an entrepreneur on the outside and put to test my skill of building and scaling an idea to a world class company of my own.
Mr.Manoj Saxena Second was that my second daughter had just been born at that time and I realized that if I didn't go out to chase this dream now, I might never ever get a chance to do this because once you move past a point in your life, the responsibilities just keep on mounting and risk appetite keeps diminishing. So I took 13 credit cards with $200,000 worth of credit on them and used it as seed funding to go after the potential I saw in helping businesses collaborate better by using Internet for automating key business processes such as marketing and sales. It was a year before the Internet boom started out, so we caught the right winds in our sail as we started my first company, Exterprise.
6. Exterprise was obviously a huge success and so was the acquisition. So what made you go back to the drawing board and start Webify from scratch with a completely different set of people?
Well, I had to use a completely new team as a necessity rather than a choice that I made. My team of about 240 people from Exterprise had become the core employees of CommerceOne after the takeover, and these people, especially the engineers, were the real stars at CommerceOne. When I left, majority of the engineering team at CommerceOne was from Exterprise. The Commerce One CEO and management feared that when I left, these people might leave with me. I had very good relationship with Mark the CEO and a high regard for him so I gave him my word before I left that I would not poach on my former team members for two years. With the exception of my Executive Assistant Norma, all of the Webify team members were new to me.
Why I started all over again was because of a couple of reasons. From a technology point of view, CommerceOne did not end up leveraging what we built at Exterprise and were not able to deploy it at thousands of businesses like we had imagined we could. They had a different business strategy and a different idea in mind of how to use the Exterprise technology. Second was the emergence of a new technology called Service Oriented Architecture (SOA) that I realized could be a game changer for the enterprise business applications market. This led me to start Webify in 2002 -- it was sort of an extension of the work and vision I was pursuing at Exterprise prior to the acquisition. There was also a small element of doubt in my mind whether I was good or lucky with Exterprise. I remember asking myself after the acquisition "anyone could have built a business in the go-go days of the Internet boom with all the Venture Capital money being thrown at startups. Were you really good or were you just at the right place at the right time?"
7. Did you always aspire to be a serial entrepreneur? I mean, did you always have an exit strategy in mind when you started both the firms?
That's an important question. You don't build companies solely with a goal to sell them. Companies are bought, companies are not sold. You build a company to generate value for your client and you build it to create value for the shareholders by changing the world. Exit through an acquisition is just one of the options to create liquidity for employees and shareholders. You can also take a company IPO and generate dividends and share growth. Many entrepreneurs start their companies dreaming of becoming millionaires, that's the wrong focus.
To use a sports metaphor, focusing on becoming a millionaire through startups is like focusing on the scoreboard and not on the game. You have to have passion to play the game and if you play the game well, then the scoreboard will automatically move forward. So money is the scoreboard and the game is the art and skill of entrepreneurship. Focus on creating value for the customer and building something that moves civilization forward. The money will follow by way of clients and markets rewarding you. I once heard a beautiful saying that amplifies this point in a different way. It went something like "Lakshmi, the goddess of wealth is a very jealous lady. If you pay a lot of attention to Saraswati, the goddess of knowledge, Lakshmi will follow".
8. Now that Webify has been acquired by IBM, how have things changed for you? And what has Webify transformed into?
Well, the fact that I am still here at IBM, even after 4 years of the acquisition is an indicator that I am pretty happy with the way things are going at the moment. IBM has given me and my team a global platform to take our Webify ideas, talents, and technology worldwide. The Webify technology and methodology for service oriented applications is now an integral part of IBM and it has helped push IBM into the whole area of Business software solutions. So professionally it has been very rewarding. On the personal side IBM has given me a work-family balance and I am able to spend more time with my 13 year old and 16 year old daughters. It has also allowed me the time to pursue my passion for motor racing something I had put on hold during the two startups. In fact, I just completed two laps across America in a race-car (www.theracetowin.org) totaling 7,778 miles and raising over $100,000 for a US non-profit focused on high school drop out prevention.
9. Mr. Manoj Saxena 9. So, what's next? Do you intend to stay at IBM?
Well, I make that decision every year. So far it's been working well, who knows, where it will go in the long term, but so far its working well. I enjoy the professional challenge and the opportunity to work with brilliant people to create new markets for a global technology icon such as IBM.
10. Why Entrepreneurship? What is the one thing that thrills you and keeps you going?
Entreprenuership is all about the power to change the world. It is about having a passion and belief that a small group of inspired and talented people can build products and solutions that can improve the way of life for customers, employees and investors. I love the energy, skill, and the competitive intensity required to build great companies.
Entrepreneurship is a team sport . One of the other things I greatly enjoy about entrepreneurship is the opportunity to work with the best and the brightest. It is true when they say that great companies are built by exceptional people. The reason I was successful with both my startups that I was able to attract, engage and execute our vision with world class talent.
11. So how do you develop these skills?
Well I think there are three parts to developing these abilities.
a) First, you need to make sure that you have a professional toolkit of skills and knowledge that is not just theoretical experience but also practical experience on how business works. I learnt a lot on the various jobs at 3M about all that goes into building a new product and creating new markets. You always hear about the Michael Dells and the Bill Gates who dropped out and became great leaders but that is a rare story in my opinion. Having a set of knowledge, skills and experience is essential to being a great entrepreneur.
b) Second, you should have a strong passion around innovation and for understanding clients and markets. You need to be outside-in driven and not inside-out driven. You need to anticipate shifts and disruptions in the market and be able to understand how you can use those disruptions to create unique value out of it.
c) Finally, you need to have exceptional people management and communication skills. You need to be able to communicate your vision, identify and inspire the best and the brightest to come join you in the crusade, and finally be able to reward them equitably. This is a crucial skill for an entrepreneur interested in building a great company.
12. You have been closely associated with VC's and CEO's of startups and I am sure you have a good view of the market and scenario in India. It is a known fact that not as many startups are coming up as are needed for the Indian economy. What do you think are the reasons behind this? What is missing here?
An excellent question and it's an area in which I have spent a lot of time thinking about it. On many occasions, I have looked at companies like Google, Facebook, Twitter etc. and wondered why no such company is coming out of India. In fact, if you take a closer look at these companies, the first layer of key employees and management will invariably include a few Indians. So why can't Indians pull off building and launching such companies? They can certainly play key technical and product roles in them, why can't they start them? I think there are variety of factors for this in my assessment:
a) I think that we don't have a very strong model for university and industry collaboration around entrepreneurship. If you look at Mark Zuckerberg and Harvard and the founders of Google and Stanford, there was a very strong academic connection between the entrepreneur and success of his company. And the Indian education system, and this is one of the reasons I am endowing a entrepreneurship chair at BITS Pilani, Hyderabad and the BITS Seed Fund. I am also working with IBM to foster connections that would help budding tech entrepreneurs in India.
b) Our culture and our business setup and markets in India does not value innovation and disruption as much as they value near term revenue and profitability. For example, in US you will often see that companies that are making 20-30 million dollars in profit are often valued at 20-30 times of that. The markets in US reward innovation and it help foster a vibrant start up environment. The Indian market however is more focused on near term and short term profits and values companies based on those. This is however changing but not fast enough.
c) The culture in India itself is one geared towards safety. Our families and peers focus more on salaries and the security of large companies. Failure here is not seen as a good thing, whereas it is not as big a deal in the US culture. An important aspect of entrepreneurship is to have the courage to fail and in India failure is not seen as a good thing. It takes a lot of courage and the culture needs to be a bit more tolerant of people failing as entrepreneurs. Failure is a much better teacher than success. We need to accept, almost celebrate, failure and the lessons it teaches us not shun it as a society.
13. Saxena foundation has always tried to promote tech startups in the States and in India, and now you are doing this in your alma mater through funding for Saxena Prize for Epsilon and Saxena Pre-seed fund for upcoming startups from BITS. What is your vision for the BITSian startups? What would be your advice to the BITSian folks?
Entrepreneurship and a solid education from BITS Pilani changed my life. I went in as a boy into BITS Pilani and came out as a confident man four years later. It was not just academic education that I got there but the other learnings on how to work as a team and the whole set of life skills that I got at BITS for which I am ever grateful. One of the goal of my family foundation (www.saxenafoundation.org) is to help enable education and entrepreneurship for students in the US and for future BITSians.
My vision for BITS Pilani is that within a decade we will have a rich ecosystem of innovative startups around each of the three campuses. They are enabled and accelerated by local venture capitalists, lawyers and accountants who work in close collaboration with these entrepreneurs for a small portion of the equity. This vibrant and holistic environment will in essence serve as an incubator for young people who will consider entrepreneurship as an equally viable option as working for an MNC company.
14. Something like the Silicon Valley Model?
Not really. I see the India model as slightly different from the Silicon Valley model. It will have some elements of the Silicon Valley model but will need to be uniquely suited to the Indian market. For example, I think in India, government and public sector firms needs to be actively involved to set up and develop these incubators around leading universities. Programs such as the Economic Times' Power of Ideas competition with the help from Department of Science & Technology in Government of India could be unique aspects of the Indian model. Around the campus with his photography kit.
15. A lot of student startups are service based these days. But, industry experts say that only product based startups are the ones that actually grow. What is your take on this debate?
Well, I think that a Services based company can be a very viable and strong approach to start off a technology or product company. In fact, in both my companies I spent the first year doing services and then shifted to products. This is not a well known fact but it helped me to bootstrap my companies and self-fund them. It is a very viable option as it keeps the flow of dollars coming in and a great way to learn what the client wants and the problems he is facing. The problem is entrepreneurs that start of with Services companies get hooked on to getting money from services and they are not able to shift gears to being product based company. Culture wise that is a very hard transition to make and often entrepreneurs try to ride both the horses. Most people aren't able to do that. This transition takes a lot of courage, it's a very dramatic shift but it is necessary for growth.
16. CEL makes a lot of effort to spread the spirit of entrepreneurship on-campus but we still see that a lot of people are skeptic about the whole notion of entrepreneurship. What would be your message to students at BITS?
I think that skepticism is not well founded at all. In my opinion BITS is perhaps the most uniquely suited of all institutions in India for preparing and launching entrepreneurial careers. More so than IITs. IITs are world-class educational institutions no doubt and many IITians have formed great companies as well. Pound for pound, I think BITS has an advantage. We have a unique environment that not only trains you well technically but always gives you business skills and aptitude through the vibrant set of student activities and the creative structure of our common engineering course work. All these give you a well rounded personality with the leadership skills that is critical becoming a successful entrepreneur. My message to the students will be focus on the possibilities of an entrepreneurial career and to take full advantage of the unique environment they are in today – both in BITS and the country at large.
I will leave you with a tongue-in-cheek anecdote that amplifies this aspect of BITS education. When I was running Exterprise, my first company, I had 40 plus IITians in my engineering team. They used to on occasion give me a hard time about how IITians were smarter and that I went to BITS because I could not get admitted to IIT. My response to them was to ask them to first look at their paychecks and notice the signature on it which was from a BITSian CEO. I used to then say "you all were trained at IITs to be great engineers. We were trained at BITS to go out and hire you engineers to lead and build great companies".