After you left the tech world, it appears to me that you realized you’re still passionate about it and something about it drew you back.
Vivek: Matthew, here’s what went through my mind; I had been through a near-death experience, okay. When you’re that… literally, I mean when I was in critical care they told my wife that I may not make it. That there was a clot developing and I had no idea that I’d make it. No one told me that. But it wasn’t clear that I would survive or not. That’s what happened here. And then I decided, you know, life is too short; you never know when it’s going to end. It’s time for me to give back and I talked to my wife about it and she said, Vivek, you like teaching, why don’t you go to Duke University, which is right next to you, just ten minutes from our house and give to students, because I was always passionate about helping and teaching.
So she thought it was a great opportunity for me to go and give back to the world that I cared so much about. So I decided to teach. I had learned a lot and I had gained a lot. My idea was to give back to America and give back to students and I started researching topics that were of national importance; how can the U.S. keep its head? What’s happening in India and China? What’s happening globally? And for me the last six years of my life have been about me giving back to this great country for giving me the opportunity to achieve so much success. So it’s all about, been about teaching. So what I do is I learn, I teach, I learn, I teach; that’s why my article is so controversial, because I’m fearless. I mean I’ve gained some knowledge; I want to share it with the world. If you don’t like it then, tough shit, you know, tough love. (Laughs) Right?
But this is what I’ve learned and this is what my opinion is and I share it with the world. That’s my way of giving back, is sharing knowledge because that’s all I have to give back. I’m not a multi… I’m not a multi-millionaire, I’m not rich. I can live… I can make do on less right now because I don’t care about money anymore. But what I can give back and I know that there’s a lot of that in it is knowledge, my learning. So I learn, I teach, I learn, I teach; that’s Vivek Wadhwa.
Matthew: Yes. What do you think are the most important elements of starting a company?
Vivek: First of all, um, you know they say history repeats itself. Entrepreneurship repeats itself. In other words the lessons that you gained at one startup apply to another, which means that you can learn from others. I mean this is something which people don’t seem to understand. They think that what they’re doing is very unique and very special. It isn’t. The basic principles of starting a business are the same. It’s the same process you go through in coming up with an idea and trying to build a prototype. It’s the same process you go through in validating that prototype with customers. It’s the same process you go through in going through an experience with customers and turning which… your prototype into a product; take your technology and turning it into a product. It’s the same process you go through in taking a technology, taking a product and now trying to develop a business model that works, which means that you now have to worry about things like distribution, sales, markets, customer satisfaction and so on and so on. It’s the same process you have to go through every time over and over again.
Therefore, if it’s the same you can learn from others; you can learn from others who’ve done it before, which means that if you’re inside a company, gain that knowledge from other people if you don’t have it yourself. If you’ve built three or four companies you know it all. You know how to do things and how not to do things. But if you don’t have that, if you just live in Stanford and design a company, surround yourself with people who’ve been through it two or three or four times before, preferably who’ve failed. Because those who’ve succeeded once begin to believe that their own press, begin to believe their own press; they think that there’s something special about them, that God gave them some special qualities and they’re smarter than everyone else is.
So you see a lot of people in Silicon Valley, they’re one-trick wonders that they achieve success and then they go around preaching to people about how their way is the only way and they’re smarter than everyone else. Their egos are, these people are if you know, once you get to know them, they’re really miserable, unhappy people, arrogant as hell because they haven’t experienced failure. They’re not humble and they misguide others.
Matthew: Excellent. And so what, you know… we know that founders have lots of different talents and you know, it’s very good to cofound companies with people that have complementary skill sets as you’ve said and many other founders have said. Looking back on your experience as a founder what skills or talents came easy to you and what were difficult, and how did you manage that?
Vivek: I mean, I needed good salespeople. I mean, I… you know, I learned how to sell by surrounding myself with the best salespeople in the world. I needed good marketing people. I needed good engineers because by the time I had become an entrepreneur, my technical skills wouldn’t do me any good, they weren’t that good anymore. I used to be one of the best coders out there when I was in my… when I started my career, but after a while you become out of touch. I needed to get the best technicians. Essentially what my skill became was to motivate people, to inspire, to talk about vision and everyone else was smarter than I was.
So my strategy was to hire people that were always better than me, that could always take over for me and they would challenge me, they would not say, “Yes sir, yes Vivek,” and do what I said, but they would basically challenge me every day to say, “Vivek, this is stupid. You need to… this is how you need to do it.” And we would get in debates and come up with better strategies as a result. That’s the reason for my success, by the way, is not my competence but the competence of the people that I surrounded myself with. Go and meet any of them and they’ll tell you about the lively discussions we used to have and how tough I was. But the fact is that I listened to my coworkers.
Matthew: And so what bit of advice or piece of information would you give to someone who’s looking to start a company? You’ve touched upon it a little bit but we want to drill down on that a little bit.
Vivek: I mean there are many, many, many different lessons that we hear. One is the process of building a company, and again… but you know what I suggest people do is that they go to my website, www.wadhwa.com, w-a-d-h-w-a.com, and I’ve written dozens of articles about the basics of starting a company. But more importantly the lessons are that… be humble; know that you’re going to fail because the likelihood is 99.9% that you’re going to fail whether you like it or not. So expect failure. Now again if you’re going to fail then figure out how to fail very fast; learn from it, iterate your way through it and get smarter. To short circuit the process to fail less, bring in people who have already failed a number of times so you reduce the chances of, you know, so that you learn from their experiences. So it’s really a process of starting off by knowing that you’re not perfect, knowing that you don’t know everything, finding people that do, trying many, many times over, being open minded and so on and so on.
Matthew: And what individual has played an important impact in terms of mentoring you along your career development as an entrepreneur and founder? And then has there been an individual who has mentored you as you’ve transitioned as an academic?
Vivek: Matthew, you know when I became an entrepreneur I had no role model. I mean I had a boss who was a great guy, Jim (unintelligible – 0:07:15.3) who was the best sales guy I knew and so I learned from him. And then I had my partners, my employees who were great technicians. What I started doing was learning from everyone I can. There’s no one person who is my mentor or who is my guide, who is my role model; it’s always many people. Even in academia, I mean I have about four or five people that I look up to whose work I take very seriously who I read, and who I go to every time I’m stuck. So you know, these basically are my academic peers. So what you have to do basically is acknowledge that you don’t know everything and go to different people for help. Don’t feel embarrassed about asking your coworkers for advice, or asking your employees for advice; you can learn from them as much as they can learn from you.
Matthew: And with your experience as a founder and your approach and your perspectives on entrepreneurship as an academic, what are some of the current trends that you’re seeing with regards to entrepreneurship and founders now?
Vivek: Entrepreneurship has become a lot more accepted and a lot more easy than it’s ever been. That before… when I became an entrepreneur, I didn’t even know what the word entrepreneur was because it wasn’t the intent. Now it’s become really cool to become an entrepreneur. They’re teaching it in universities and mindsets are changing about entrepreneurship. The other thing is let’s get beyond Silicon Valley because everyone seems to think that the world revolves around Silicon Valley. Silicon Valley, it doesn’t. There’s a much bigger world out there. In this much bigger world fear of failure is still an impediment. That in India, China, in Raleigh, North Carolina, in Boston, people are… if they fail, they’re stigmatized. The change that’s happening is that failure is becoming more acceptable in many, many other parts of the world, therefore entrepreneurship is becoming more acceptable and you’re seeing a lot more of it.
Matthew: And in terms of capital, capitalizing enterprise is always an important issue for a founder or founders and there are several ways to do that. You could bootstrap the business, you can raise institutional money; I notice that you have some thoughts on that. Can you speak to that a little bit?
Vivek: Well in the Web tool world and the software world it’s become very easy. You don’t need to raise big money anymore. My advice… and even in the non-Web world in many cases it’s become a lot easier; if you’re designing a new drug then you need tens of millions of dollars because there’s no hope there, you have to go the traditional path. But if you’re doing almost anything else, if you’re doing many other things then you can experiment. My advice always is that you bootstrap and you get to the point that you have a technology that people want and then you can raise angel capital.
So again what you do is you can have an idea, you test it, you share it with customers, you get it right and you come up with something, a prototype that customers when they see it, they say, “Boy, I’ve got to have this.” When you’re at that stage you go for venture… for angel capital, okay. At this stage you’ll be able to get half a million dollars, even a million dollars by going to angel investors who will believe in you. And then you use that to build a real product and then now you perfect a business model, you figure out how you’re going to distribute it, how you’re going to price it, how you’re going to sell it, how you’re going to deliver it, how you’re going to gain customer satisfaction and deal with problems and so on and so on. So you get that business model right and once you have that, then you’re ready to grow… you know, grow like that.
Basically what happens is that you’re now in an inflection point when your company really can scale. You need lots of money to do that because always scaling is very, very expensive. That’s when you go to a venture capitalist. VCs invest at that stage of company. You know, many VCs love to meet early-stage entrepreneurs. They hang out at parties and they invite business plans, but they’re just using it to get smarter, they’re not going to invest in startups; they’re not going to invest in risky little ventures. Forget about your reading on TechCrunch; they just don’t do it. There are some exceptions that invest in people that have built a Twitter or a Facebook because they believe in them, but they’re not going to invest in a kid out of school no matter how good the idea is. That’s just the reality of the world. So go to venture capitalists when you have perfected your business model and when you need cross capital. The likelihood of you getting money is much, much better and you won’t be wasting your time getting there.
Matthew: And you know, what… in your research what, you know… share with us something very interesting that you’ve discovered lately that you didn’t know before?
Vivek: Well, I’m writing an article today about liberal arts versus engineering. I used to believe that engineering was everything; I used to believe that engineers dominated Silicon Valley and that liberal art was irrelevant. I mean I used to pooh pooh it myself for the longest time. After having been in Silicon Valley for 18 months and having met hundreds of entrepreneurs, after having looked at the data that modern research uncovered, after understanding the magic that makes Apple what it is, I’ve changed my views completely on this; that even you, Matthew, as a lawyer, can still save the world. (Laughs)
That you don’t have to have an engineering degree to do everything; that having a degree in psychology could be invaluable in designing great user interfaces and in developing marketing programs. Understanding English could make you a great communicator. I mean, so the liberal arts are as important as are the hard sciences and engineering and mathematics and so on. So that’s something which… and I just… you know, Matthew, this was not something I realized that I even knew until yesterday when the New York Times wrote to me asking me to write an article for them about it. So I basically realized this by writing an article.
Matthew: Excellent. And there’s this debate… I don’t think it will ever be fully answered but you know some people tend to think that entrepreneurs are born, some people think that they’re… they’re taught.
Vivek: Entrepreneurs are taught. Don’t believe this bullshit about they’re born. Because born comes from the VCs who say, “We know it all. When we meet… when we meet an entrepreneur, we know if they’re going to succeed or not.” Complete utter nonsense. No one is born an entrepreneur, I wasn’t born an entrepreneur. I mean I could never imagine that I would be writing about entrepreneurship, become an entrepreneur or teaching entrepreneurship; none of these things. Life makes its own plans and you learn, you grow; most entrepreneurs have lots of experience, so entrepreneurship is something that can be learned. I mean, yeah, some people are very entrepreneurial in their youth but entrepreneurs can be made, that’s the bottom line.
Matthew: And so what are some of the things that you’re tackling in your current research going forward?
Vivek: Well, right now I have a project looking at the venture capital system. There are a lot of myths about venture capital that people believe that VCs are a prerequisite to innovation, they believe that VCs are the reason companies succeed. Some of, you know, that might partially be true but there’s been no data on it. I’ve just finished… we’re just finishing some detailed interviews and surveys of 150 entrepreneurs in which we ask entrepreneurs who’ve raised venture capital what their views are. I haven’t looked at the results yet on purpose, but in the next two months or so the results will be out and I’m going to make sure everyone reads about them.
Matthew: Excellent. And so you know, before we close I’d like to get or hear from you kind of your vision of your research and what you’re gonna… where you’re going with it and how you hope to change the world with it.
Vivek: Matthew, the reason… the overall theme for my research is global policy. I’m looking at what makes America competitive, what problems it has, how the world has changed, and I’m trying to come up with prescriptions on how to keep this country competitive. Entrepreneurship is one of the legs of the stool. So entrepreneurship, immigration, our university research system and so on and so on. So I’m looking at the different topics to come up with prescriptions to help the U.S. win, to help the U.S. compete, to help it stay ahead because I’m an American and I really believe in this country. And that’s what all my energy’s going into, and I’m again not making any money on this thing, I’m doing it as my way of giving back to this great country.
Matthew: Vivek, it’s been a pleasure having you here today. We hope you’ll come back as a guest at FounderLY.
Matthew: Really appreciate your story. For those in our audience who want to learn more about Vivek and his research you can visit him at www.wadhwa.com. Again…
Vivek: W-a-d-h-w-a; let me help you. (Laughs)
Matthew: Thank you, Vivek, we appreciate it and we’re looking forward to reading more of your research.
Vivek: Sure, anytime.
After you left the tech world, it appears to me that you realized you’re still passionate about it and something about it drew you back.