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B
V Jagdeesh : A Profile
 IT
entrepreneur extraordinaire B V Jagdeesh (co-founder
and CTO of Exodus Communications) is tall, articulate,
with a deep voice that resonates across the living room of
his family home in Bangalore. His commanding presence is enhanced
by a sunny California smile. In town for business and pleasure,
rounds of celebrations and felicitations, he personifies the
boy next door who made it - and how! We had
heard of Indians excelling in the Silicon Valley, but he caused
a stir when he donated a million dollars to the BMP (erstwhile
BCC) schools. Why? Spurred by a conviction that if he, a product
of the public school system, could make it, then there were
perhaps thousands of young kids he could reach by revamping
the school system. His vision? Creating wealth and opportunity.
His satisfaction? Making it happen. Yes, we can barely keep
up with the unbelievable goodwill and money flowing back from
the land of opportunity - to his alma maters, to his community,
to his roots. We were privileged to meet this amazing achiever
whose technical brilliance and philanthropic extravagances
are legendary.
From Bagalur to Saratoga…the journey
Tell us how it all began…
It was one of our dreams. We started with the intention of building
a company that has an impact on every business in the world.
So to an extent, actually we have achieved the dream. Because
Exodus being the central force for the entire Internet,
and being a part of the entire Internet growth, all the companies
and all the human beings in the world, in some form or the other,
have to come to access the information from Exodus. Which
I think is a phenomenal achievement. And you know, we started
off as a software consultancy in 1994 called FOURESS,
and very soon we realized, in the middle of 1994, software consulting
is not a company that is going to take us to the dream that
we had when we started this company. So some time late 1994,
we got an opportunity to get into this Internet business. We
saw a niche, we saw a hole, and we jumped into this Internet
market.
Until 1995 end, we kind of self-funded and so that was the
toughest time of our life, because we had mortgaged our
house and our personal property to get credit lines - to get
loans from the banks and so on and so forth so. We did all those
things more as a passion to build a business without really
understanding the legal implications. So, had we known at that
time, that the legal implication is that eventually the banks
could take away our house or our personal property, perhaps
we would never have signed. So in one way it actually worked
out well, we kind of blindly signed the papers to get the ball
rolling.
You know, even though we went through lots of down times- very
rough times - sometimes we couldn't even make the pay cheques
for the employees - but we were very fortunate that the first
20 employees were very loyal, very dedicated, and that despite
the fact that we did not even have a stock option plan for anybody
when they joined. So many people had trust in us, despite the
fact that we were Indians. And when we opened up the stock options
plan, we made sure that all our employers were fully taken care
of. So, as a result, even a secretary who had joined us in the
early days is perhaps worth about two and a half million
dollars today! As founders, it is not that we just want
to keep the entire company to ourselves. We made sure that it
was well distributed. We got our first funding in 1996 and Mr.
Kanwal Rekhi was extremely instrumental in recognizing this
opportunity and funding, which was kind of a life saviour for
us. Had he not done that, perhaps we would have closed down
or sold the company to somebody else.
At that time, what was the pitch like
- in today's jargon, the 5-minute elevator pitch?
At that time, we weren't really the sole Internet service providers
for business…that was the pitch.
We needed to be the key Internet service provider for all
the businesses in the world - that was our dream, with
lots of value added services based on intellectual knowledge.
At about that time, we got the funding and we were in the business
to provide complete Internet services, which include Internet
access, Internet consulting, Internet co-locations. August-September
of 1996 is when the shift started to happen, that the
opportunity actually existed in the web co-location business
rather than in the pure Internet services business. The entire
company essentially started to focus on providing the web co-location
and the Internet hosting business.
Dedicated
server?
It is a dedicated server - customers can build their own servers
in a very secured environment - highly secured environment.
Lots of technology based solutions. This was the killer
application that the customer could pay for. In fact,
the interesting thing was when we built the first Data Centre,
it was only 2000 sq ft of space! Of that, about 1000 sq ft was
dedicated for the Internet access business and the other 1000
sq ft was dedicated for the Data centre. According to our expectation,
that should have been filled up by 1997 end, which is like one
and a half years after we built the Data Centre. But it so happened,
it got filled up in less than two months. The demand was so
huge, we moved all the employees out and we built the remaining
13,000 sq ft also as Data Centre. From then on,
(smiles broadly), money started pouring in - investors
wanted to invest more and more in to the company and we
never looked back after that.
We opened up one more Data Centre in New York. So that was '97
April. And then after that we opened up three more. One in Seattle
- one in Los Angeles - and one in Washington DC. We had five
Data Centres by the time we went public in March of 1998. Our
revenues were 12.5 million dollars. At the time, when we were
going IPO, we brought Ellen Hancock to become the president
of our company. Because the company was growing at an enormous
pace - you know, we had lots of issues related to customer's
services - so we found Ellen Hancock, who came with lots of
experience and contacts, which was very helpful for the company.
So she came on board just around the time when the company was
going public.
After six months, she became the CEO and Chandrashekar
remained the chairman until last month. He stepped down as the
Chairman. I have been the Chief Technical Officer, but even
I am minimizing my work at Exodus. That's because I am getting
more involved in the entrepreneurial activities and more so
in India as a matter of fact.... helping build companies. So
I have invested in four companies so far in India. I'm very
actively involved in all the four of them. Also, we are initiating
an educational project in Bangalore and in the Indian
School of Business, Hyderabad as well. So I thought my time
could be a lot more beneficial if I could spend it more meaningfully
than just building one company. Currently the company is in
a cruise-mode (makes a smooth driving gesture).
We have hired a lot of good people. The company can move forward,
you know, even without people like us.
What are the steps you have taken to
ensure that the funds (1 million dollars) pledged to revamp
the 133 Bangalore Mahanagara Palike schools will reach the target
population?
What we have done is, we have not given money to the government.
The Government did not receive even a penny. Instead what we
have done is, we have set up a very high-powered committee which
includes my brother, BV Kumar, AH Ram Rao, who himself
is an educationalist. He writes lots of books that are widely
used in schools and colleges; and Prof Dr. Radhakrishna,
who is the Principal of Sheshadripuram College; and Dr.
H Narasimaiah. These people we have identified, and certain
partners who could essentially help us to bring quality education.
And we are completely driving this program ourselves.
The Corporation is helping us identify the schools - identify
the leaders in the schools and see that they co-operate with
us during our plan of implementation... Currently our goal is
to train the teachers, to give them modern tool kits to understand
the subject matter that they are going to go back and teach
their students. So they can train their students in a more graphical
representation. We are working with an organization called Schoolnet,
which specializes in building content that are a lot more meaningful
and a lot more self-learning. Schoolnet will train these teachers
and by then they will have computers launched in each
and every one of these schools. This is the Phase One
of our project.
What is the social impact of the computers and Internet?
The
social impact is to truly eliminate, number one - the communication
gap, and number two - distances. So because of that,
people here know more about what is going on on the other side
of the world. People there know more about what is going on
in this side of the world… And that is eliminating the knowledge
gap that existed before…
In
response to questions about developing software
companies/products in India for the local market in local languages,
and its difficulties:
Why should it happen in America and why can't it happen here?
If there is an opportunity, if there is a way of doing it, then
entrepreneurs should look at it from a different perspective.
Don't expect large corporations to do it; don't expect the government
to do it. Did the government invent PCs? No they didn't!
They are just buying PCs. Government didn't see the importance
of having a PC. Now that they see the importance of having a
PC, they are implementing it. So an entrepreneur should see
the importance of the local languages, you know, support it,
and then push from that angle. There is a risk - of course there
is a risk, but an entrepreneur cannot think like a big company…
see, everybody is trying to build the same products and the
same services as America is doing. I think we should slightly
move away - look at the needs of our people and our products
and develop the products for that.
What can India do to improve
its position globally?
(Sighs). So many things! India has to essentially open up very,
very quickly. Essentially, telecommunications. We have
this tendency to think that telecommunication is a luxury. That
mentality must go away. If we have to talk between the
two of us in whatever media, whatever form - this is not a luxury
- it is a necessity. So that's why I keep saying,
the reason why it is a luxury in India is because the telecommunication
authority actually charges you one rate for a certain amount
of calls. And if you exceed that number of calls, they are going
to charge you more, which is totally against [logic] in a developing
country.
When you have abundant supply - what happens is that as the
volume of the usage increases, the cost drops. They want you
to use more - so that they can build high volume fibre links,
which will bring the cost down. In India we do not think that
way. We don't think from the angle that this is an absolute
necessity today. But because the infrastructure is so bad,
because we penalize the users - one for paying for the form
and one for ISP services - so people have to think 10 times
before using the Internet. So it is not that 'Hey I will
just go on and use it for unlimited duration of time', I
have to think10 times - 'How much money, how much bill I
will end up paying at the end of the month'.
The whole mindset of the fact that telecommunication is no longer
a luxury - it is an essential thing for every common man
- will lead to many more entrepreneurs opening up our
companies. And these venture capitalists coming in from all
countries outside of India, who are investing lot of money into
these companies - they all need to flourish. Once they flourish,
they will end up creating lots of jobs, especially in the service
economy. So hundreds and thousands of tier-one types of jobs
are going to be created and we will have millions of other jobs
created to support the tier-one. So we have to think from that
angle, it has to be a long-term design.
Some argue that due to too much emphasis on IT, the other sectors
are being neglected.
See where
the job opportunities are - where the country has the potential
to grow? Where is the world moving? Where is the market opportunity?
So IT is playing a major role in making that happen. If that
can create millions of jobs, directly and indirectly, then
why not emphasize on it? We have found a niche just like,
you know, in a product company. When you produce a product
the only way you sell that product is if you find a niche
in the market. It has to be very unique. If every other company
is doing it and I am also doing the same thing, then how do
you market it? How do you position it? Where as, if you basically
have found a niche, then you know how to position that and
people are willing to pay millions for that.
As far as India is concerned that's where the emphasis
is - that's what the world wants. The world
wants India to help in the IT industry.
While
India is doing very well in IT, 80 to 90% of the revenue is
coming from IT related services, not IT related products.
But you see India has to start somewhere (earnestly). What
is happening now is that until recently, there was no concept
of investment that was coming into this country. So how do
all these services start? The petty money people save in their
banks. If you look at Infosys - Narayana Murthy
borrowed Rs. 15,000 from his wife to start the company. Right?
The same story applies across the world to each and every
one of the software services. However, the whole dimension
is shifting right now. There is a lot of venture capitalist
activity going on right now. So if you want to get into the
product or product services - somebody has to fund you. Right
now a shift is happening from the traditional software services
into product services. In fact, one of the companies
that I have funded in Bangalore is producing an e-mail
device primarily designed for the Indian consumer, which is
going to cost around Rs 5000 and on a monthly service of Rs
50. Anybody can send and receive e-mail in a very
cost effective manner. Those who cannot afford to pay Rs 40,000
to buy a PC can pay Rs 5000 and participate in this
Internet revolution....The version that we are working
on actually doesn't even need a TV. It has its
own screen. The later versions we will introduce, instead
of that screen we can have a TV as a screen. If the TV were
used now, you'd still have to use the regular ISP, which is
going to cost Rs 200 per month.
In America,
recently, there was a report about the "Indian Internet Mafia"
in the Silicon Valley.
Comment.
Ha ha ha... Started in a nice way! Essentially, you know,
what happened was just like the mafia in New York, who are
known for all kinds of underground activities. Now Indians
have done extremely well - especially in the last four or
five years. So many Indians have come to prominence. At
the end of the day what matters is creation of wealth. Whether
you are an Indian or Chinese or who ever it is. If
you have wealth people will come to you - people want to look
at you. Whether it is politicians, whether it is venture capitalists,
whether it is financers, whether it is other businessmen.
So now everybody says, " Hey! These guys are not like where
they need help all the time. These guys can do it independently."
Right? Previously Americans used to think that "Indians" means
- they need help. But now, with all these companies being
so successful, people are realizing that these guys can do
it on their own. There are so many of us who have proved that
we don't need help. And with the financial muscle that
we have today, you can pretty much do anything.
Why are Indians
excelling in the IT field?
Indians are very natural in the IT field because we are very
good at mathematics and communication. An Indian invented the
number system. Imagine if the number system didn't exist, we
would still be writing those 'Vs'? Just think if we were to
write million dollars (laughs) in Roman, how many Vs and Xs
we are going to write! So because of the natural emphasis that
as parents, people provide to their children towards mathematics,
they have the natural aptitude. After all, IT is nothing but
a logical way of thinking… we got to demonstrate
- we got to prove that we could do very well in
the IT field. We can be the leaders in the world market.
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- Mitra Das and Shivaram
R
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Getting to know Mr.
BV Jagdeesh
(Dr. U. Pavanaja, Editor, www.vishvakannada.com
- the first Kannada Internet magazine on the web also fielded
questions during this interview in Bangalore).
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12:38:04 AM 
