The Hindu Business Line : `Weekend start-up'

Sashi Chimala was probably among the first 100 engineers to be shipped from India to work onsite in the IT (information technology) industry in the US. His first assignment was with Burroughs Corporation (later renamed Unisys). This was almost three decades ago, when outsourcing and offshoring was unheard of, and IT had not yet become a `fashionable' industry to work in.

Talking about those early days in the IT Industry, Chimala says "While the clich‚d view was that the Indians rode on elephants to school, the more interesting one (from an Indian IT industry point of view) was that all the US managers were of the unanimous opinion that Indian IT workers were `hard working' and `fast learners'. This really was an important quality that got them to continue to engage with the Indian IT industry during that early phase."

In the late 1980s, Chimala helped his friend Raj Vattikutti set up CBSI (later Covansys) and a few years later, founded Indigo Technologies, a company that built stock exchange automation software. In 1999, after having sold Indigo Technologies (to SSI Tech), he chose to move away from the IT industry to start Qwiky's Coffee Pub, a coffee chain which, he says, was "well ahead of its time".

In recent times, Chimala has come back into the IT industry with Internet start-up ventures such as CricTV.com, Knibble.com and Paypod.com. He says being an entrepreneur and helping other people become entrepreneurs drives him and expects India to play a major role in the emerging Internet Economy.

Buoyed by the new trend of `weekend startup', Chimala is currently exploring the possibility of bringing this concept to India. In an e-mail interview from the US, he shares with eWorld his thoughts on the trends in the IT industry, the current slowdown and his plans for a seed stage venture fund in India.

How was the IT scenario in the late 1970s? What were the challenges?

People were not very aware about India. Most were not aware that English is a medium of instruction in schools and colleges. As many people hadn't travelled to India and there was not much coverage about India (remember, there was no CNN in 1979), there was very little awareness about India. Some believed that we rode elephants to school and snake charmers could be found everywhere. This was obviously a very `clich‚d' view of India.

However, almost all of the managers were of the unanimous opinion that Indian IT workers were `hard working' and `fast learners'. While the lower cost was the initial draw, the quality of work product was what made them continue to employ Indian staff.

What were the early trends during that period? Did you visualise that the Indian IT industry would take off in the way it has?

The initial trend was to `import' more engineers from India. The word spread slowly that India could be a great source of cheap talented pool of software engineers. Of course, the type of work given to us was mostly coding and did not involve design of the software. But slowly the responsibilities given to us grew and we were asked to participate in systems design and architecture, in addition to coding work.

I don't think anyone guessed that India would eventually become the leader in providing outsourcing to the US and the rest of the world. But it was obvious that outsourcing work to India was a natural progression from exporting people to US work sites.

I think India also had its share of luck in addition to being at the right time with the right talents. The much-hyped Y2K problem was a boon to India. US companies suddenly needed a lot of work to be done within a limited time span, that too with a hard deadline (1999 year-end). While the US Government helped by temporarily increasing the H1B quotas for the Y2K projects, it was obvious to everyone that it would not be possible to bring in that many engineers into US. So, US companies had to let the work be done `off shore'.

In hindsight, this served as a remarkable opportunity for Indian companies to showcase that they can take large projects and complete them successfully. While many expected the work flow to dry up after Y2K, many US companies continued to send more work because of their great experience with Y2K projects.

You were involved in a start up in the IT industry (CBSI) that later became quite successful.

Raj Vattikuti (the founder of CBSI) was a good friend. I helped him start the company by giving him his first project. I joined CBSI after about nine months of its start. Initially, I worked as one of the project leads on a few client projects. Later I developed in-house products. We sold them to large clients such as the World Bank and the US Government. I also helped Raj with Marketing and Sales. Then I moved to California to set up CBSI's west coast operations.

The main challenge for us was in getting sufficient visas and work permits. Clearly the demand outweighed the supply but because of the H1B visa limitations, we were not always able to get the staff when needed.

And then you set up Indigo Technologies.

The work we did at CBSI, at the time I left, was limited to staff augmentation and onsite projects. I was intrigued with software development and always wanted to build large-scale software products. This proved elusive to many companies because of huge investments required and the risks of acceptance. I left CBSI to start Indigo, with the goal to develop some leading edge software products. We ended up building large stock exchange automation software that eventually ran the Madras and Dakha stock exchanges, among many.

After almost two decades in IT, you moved on to a completely different space.

I started Qwiky's (the lifestyle coffee pub) in 1999 just around the time the Internet was at its peak of pre-crash hype. It felt unreal to me and I wanted to do something in the `brick and mortar' space. Looking back, it was quite contrarian. However, Qwiky's was a concept way ahead of its time. The experience was enjoyable but the subsequent dotcom crash had its impact. I believe the market is now ready for such products.

And post Qwiky's, you seem to have come back into the IT industry?

Post the dotcom crash, the Internet industry redeemed itself and the second wave of companies seemed stronger to me. With the new Internet technologies, it became cheaper to innovate. I realised we are entering a very unique and exciting phase and wanted to participate in it. The other attraction is that it is mostly business to customer (B2C) and customer to customer (C2C).

What are your plans?

I am working on an innovative seed-stage venture fund to help turn ideas to businesses. The focus is to nurture start-up companies by young entrepreneurs and provide complete hands-on assistance in a campus-like environment.

VC firms are beginning to look at India seriously. However, my personal opinion is that the traditional western model will not work well in India. We are planning to approach the opportunity differently by complementing the entrepreneurs with other talents, letting them focus on their core skills and providing the complete eco system to nurture a business idea into a fully operational company.

In fact, one interesting new trend, in the US, is what is called a `weekend startup' - create and launch a new Web start-up over the weekend. I am currently exploring the possibility of bringing this concept to India, especially to help young entrepreneurs there.

For most part, you have been an entrepreneur..

Being an entrepreneur and helping other people become entrepreneurs drives me. The IT industry is a great catalyst for entrepreneurism because the entry barriers are low (compared to traditional businesses). It is an ideal platform for middle-class people because the main asset required is knowledge and not huge capital. This is especially true in the Internet space because for less than Rs 10 lakh and within about sixty days, one could launch a Web service and potentially build the next Google or YouTube.

What is your view on the current scenario and the outlook for the IT industry?

As India's main value proposition is to lower the IT costs, the impact should be minimal. But I am concerned about the `increased expectations' from the financial markets. The US economy is in a difficult position. As you know, `when the US sneezes, everyone catches cold'. But I think India has a better immunity than many other countries. So, India may `feel under the weather for a few months' but I don't think it will catch the flu.

Given the current challenges, what are the growth measures the industry/IT companies should take?

Improving the quality of the skilled labour should be high priority. IT companies should focus on becoming `more people productive' - i.e. be able to derive better productivity from the people they already have than having to recruit more. Also, they should adopt some of the newer trends in IT such as `software as a service'. Third, invest in infrastructure, especially in broadband technologies.

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