Bangalore: For Devdutt Yellurkar, both the audience and questions were familiar.
On a sunny afternoon last Saturday, a small group of entrepreneurs that had gathered at the sparsely furnished office of Sen-Sei Technologies Pvt. Ltd, were quizzing him on what made a start-up click.
Click here to listen to XITE founder, Jagdish Vasishtha, talk about Infosys, XITE, and life as an entrepreneur
Yellurkar, a partner at US venture capital firm Charles River Ventures, had joined Infosys Technologies Ltd, now India’s second largest software exporter, in 1987 when it had just 25 employees. Some years later, he co-founded Yantra Corp., a product firm incubated by Infosys, before leaving it in 1996.
The group—XITE, or Ex Infosys Technology Entrepreneurs—had lots to glean from him. It was their third quarterly meeting since the group was formed in January and Yellurkar was on a visit to Bangalore. When they aren’t meeting, members keep in touch through an online forum to exchange views and ideas, and lend each other a helping hand.
“Suddenly, I discovered that there are many people (from Infosys) starting companies. I thought why not we keep in touch and share ideas,” says Jagdish K. Vasishtha, who started XITE. “Any start-up faces the same issues.”
Back together: Members of XITE, or Ex Infosys Technology Entrepreneurs, at their third quarterly meeting since the group was formed in January. The members also keep in touch through an online forum. Jagadeesh NV/Mint
Vasishtha and his colleague Srinivas Seshadri quit Infosys in 2006 to start Injoos Web Solutions Pvt. Ltd, which makes a pay-as-you-use social business software that allows companies to store and mine documents, even scrap notes, created by its employees, on the lines of general social networks such as Facebook.
The group currently has some 50 ex-Infoscians. Most of them had quit the information technology (IT) bellwether in the past three years to follow their own dreams, following the example of N.R. Narayana Murthy, who left Patni Computer Systems Ltd and founded Infosys in 1981 together with six others.
The story of Murthy founding Infosys with an investment of Rs10,000 borrowed from his wife Sudha is a legend in Indian industry. The firm, now a constituent of the Bombay Stock Exchange’s 30-stock benchmark index, the Sensex, employs at least 100,000 people and reported revenue of Rs21,693 crore in 2008-09.
“Once Murthy found the right business model, there was no looking back,” says Yellurkar, who’s not a member of XITE, but is seen by the group as an inspiration. In the early Infosys days, Yellurkar used to market its services in the US from his home before the company opened its first overseas office. “His passion rubbed (off) on us. It was magic.”
For many of the XITE entrepreneurs, Infosys was their first and only employer. “The grounding (at Infosys) was solid. The exposure to both technical and management issues were (the) best,” says H.S. Sudarshan, who founded Onze Technologies (India) Pvt. Ltd with three friends. Onze offers a service for mobile phone users in Bangalore and Chennai to find directions via SMS, or short messaging service.
Murthy attempted a shot at creating entrepreneurs within Infosys by incubating two firms—Yantra, an IT products firm that it later sold to Sterling Commerce, part of US communications firm AT&T Inc., and Onmobile Global Ltd, a mobile services firm that’s listed on Indian bourses.
The objective was to generate more jobs, says Murthy. “If millions of Indians have to be lifted out of poverty, there should be entrepreneurs who generate high-paying jobs and create wealth. That can’t happen by building one Infosys, there should be thousands of Infosys for that.”
But with few ideas coming from employees at the time, Infosys didn’t pursue it further.
The firm, however, created enormous wealth for its employees by offering stock options, among the first to do so in India, till it discontinued the practice in 2003. The wealth made millionaires of several Infosys employees, and gave them the financial security they needed to step out.
“The Esops (employee stock option plans) gave us relative financial stability; perhaps helped people like us to pursue other dreams,” says Khushnood Naqvi, who, along with two other ex-Infosys employees, started Ninety Degree Internet Software Pvt. Ltd, which runs a travel portal, 90di.com.
The trend of IT employees starting their own businesses has increased in the past few years. Wipro Ltd, Infosys’ neighbour in Bangalore and India’s third largest software firm, has a history of creating entrepreneurs or top executives who have gone on to head other companies.
Ashok Narasimhan, the first chief executive of Wipro’s IT business, co-founded mobile media firm July Systems and Technologies Pvt. Ltd ; K.B. Chandrasekhar and B.V. Jagadeesh, who co-founded Exodus Communications Inc., an Internet hosting and services firm, in the boom era of dot-com days.
Chandrasekhar has since founded Jamcracker Inc. , a software firm in the US, and e4e Inc. , which provides business process outsourcing services.
And the biggest ex-Wipro story is MindTree Ltd, a mid-sized IT services firm founded by six former Wipro employees, including Ashok Soota and Subroto Bagchi.
Ex-Wiproites, however, haven’t grouped themselves formally, but are networked.
“All of us keep in touch; we have taken advice and help (from those who) started out earlier. Other people come to us,” says Anant Koppar, who quit Wipro to found IT services firm Kshema Technologies Pvt. Ltd and later sold it to Mphasis Ltd, now a unit of Hewlett-Packard Co. He now runs KTwo Technology Solutions Pvt. Ltd, an IT product and services company.
Koppar says there have been a couple of changes in the Indian ecosystem that helps people start businesses.
“One is access to capital; second is that we have a domestic market now, with which we can test out ideas,” he says. “And also, in tough times, it brings out something for people to start on their own.”
At the XITE meeting in Jayanagar, and a few blocks away from where Murthy stays in south Bangalore, the conversation veers around the years when several members knew each other as co-workers. The pace at which Infosys had grown in recent years gave them little room to experiment or try new things.
“In 1997, when the company was 3,500 people, the culture was very informal and you felt that you are changing the world. In 2007, if I told my name, the security would ask your employee code. It is almost like losing your identity,” says S. Sukumar, who co-founded Astutix Learning Pvt. Ltd, an e-learning company.
Murthy defends the Infosys culture, saying it remains the same. “There is opportunity to be entrepreneurial (within Infosys). We have opened several new services and have gone to new geographies. People can still take up new initiatives.”
In the office of Sen-Sei, a technology consulting firm founded by N.S. Nagaraj and Srinivas Thonse in 2008, Yellurkar remembers Murthy’s focus on efficiency and global focus.
“Employ people who are smarter than you, and focus on big markets,” he says. “That will be the game changer.”