This is Kamla Bhatt. Today my guest is Ram Shriram, who is the founding board member and the first investor at Google.
Prior to Google, Ram was with Amazon, Junglee and Netscape. He heads Sherpalo Ventures that helps early stage companies primarily on the web. Recently, Sherpalo has branched into Cleantech.
Kamla: Welcome to the show Ram.
Ram: Thank you and glad to be on your show.
Kamla: What browser do you use?
Ram: Today, I use Chrome. I’ve switched from Firefox to Google Chrome.
Kamla: I want to switch back to your early days. You were brought up by your mother who was a teacher at a local college in Chennai, India. Tell us some of the qualities that you attribute to your mother and that has helped shape you as a person.
Ram: My mother has been my mentor in my life. The number one attribute was discipline. To be on time to school, never miss a day at school and then checking out homework and making sure I was doing it correctly and signing me up for lots of activities, extra tests and classes. Also play tennis at the local tennis club to make sure that had some sports activity as well.So that was my early life and I was an only child and she was a professor of English at the University of Madras, We stayed with my grand parents so that is where I was raised.
Kamla: Which school did you go to?
Ram: I went to Don Bosco and then later to Loyola.
Kamla: What did you dream of becoming when you were young?
Ram: You know, quite frankly I don’t think I was dreaming of anything big other than perhaps joining my grandfather’s business. He had an independent business at that time in Chennai. During my free time, I used to sit there and watch him talk or watch him deal with his business associates and so forth. And that was sort of my learning outside school. So that environment sort of shaped me in my early days but I didn’t really have any aspirations other than that I wanted to go abroad and study and so forth. But it wasn’t a very clearly defined thought as to what I would become later.
I was a very confused youngster at the time, infact I was somewhat rebellious and that I didn’t want to take the IIT entrance exam and so forth. This is in the mid-70s so it’s typical of that generation where I think the opportunities that existed in the India of today, hadn’t yet opened up. And it was still very much a business of figuring out whether you could run your family business or be in real estate or do something that was like working for a bank. So those were the jobs that were available in those days. But I wasn’t even thinking that far ahead.
Kamla: So, safe government jobs?
Ram: Yes, exactly!
Kamla: What exactly did your grandfather do?
Ram: He had a small business in the South selling electrical products. Basically the electrification of the cable- the cables were being laid, grid infrastructure was being laid in the 60s and 70s. And so he was involved essentially in the retail sales of that stuff.
Kamla: Then you go to school, you do a bachelor of Engineering in India, in Madras and you come to the US. You go to Michigan. You finish your MBA and then you come to Silicon Valley?
Ram: No it wasn’t that simple. I ended up working in Michigan for a young company called Sycor out of Michigan, worked there and that company got bought by Northern Telecom. We became the Bell Northern Research Labs of Northern Telecom. So I actually ended up working there in software QA in engineering and that was my first job. And that helped me sort of go through the whole labor certification green card process, which back in those days was only nine months long; the whole process was nine months long.
I stayed there for two years and then the company which was by then Nortel or BNR moved me to Minneapolis where I shifted from engineering to marketing. And I did international marketing for their distributed data processing products out of Minneapolis. I traveled the world at a very young age, which was a great experience especially, going to Europe often, going to Japan for 3 months setting up of Japan operations and so forth.
And I was in my sort of mid-20s and was not yet married so I had no encumbrances, no guilt feeling of having to go back home. And it was a great time to travel. To really understand how to do business in other cultures and other parts of the world. And being able to do that under the auspices of a big company also made it very comfortable.
Kamla: How did you arrive to the Valley then?
Ram: I used to fly out to the Valley from Minneapolis and if you know, Minneapolis is a very cold place in winter. I had an ethnic preference if you will, for the warm weather, coming from Chennai. So I finally said, look can I move to California because every time I come here, it would be in the 70s or 80s and there would be beautiful blue sky and warm. I go back to Minneapolis and it will be 20 below in the winter!
So I finagled myself out of Minneapolis by trying to get a job here, which I succeeded in and I became the director of marketing for the PBX product line that was actually based out of Santa Clara. BNR labs were in Mountain View and this was in the early 80s.
Kamla: So since then you’ve continued to stay in this area?
Ram: I’ve been in the area since the early 80s so it’s been over 25 years now.
Kamla: The 80s and then we’ll switch to the 90s were a very interesting phase for you because that was the time when you were involved with some start-ups. You made a few errors if you will. What was that learning experience like working in start ups that didn’t take off?
Ram: Yeah, I wouldn’t call those errors as much as badges of honor. Basically I left Northern Telecom after 7.5 years of being in one company after school. And then, I ended up in a series of start-ups. The first of those was a company called Sitech and they were in local area networks.
I was sort of thrown into baptism by fire, I was thrown into the middle of the action to go off and build a relationship with IBM and then later we turned around and sold the same underlying token-ring technology to Apple for their first Mac products. This was the time when Scully was taking over from Jobs and so forth. There was a lot of turmoil in Apple at that point of time and they were interested in the enterprise market.
If you hark back to 1985, those who are students of old PC history, they would remember this stuff. So that company was successfully sold because of these two big successes of IBM and Apple- they were 2 huge network systems. They bought the company for- I don’t know what the number was now but they bought the company for seven or eight figures. Everybody succeeded, including myself.
Then I went of to start a wireless local area network company. So the beauty of it is, the Reagan administration had begun to de-license spectrum back then. So we built a product in the 902 to 928 megahertz spectrum which was going across 4 channels over Apple Talk speeds, maybe over Ethernet speed we thought in due course. But we were starting with maybe about a megabit of bandwidth over four channels, each of over 250 kilobits approximately. And we built a product, the product worked but it was a solution in search of a problem at that time, because if you recall, PCs were there but laptops had not yet started off in large numbers in the late 80s. The only laptop at the time was Grid.
Grid made this heavy; luggable that would cause you to have spondalitis if you think of the light laptops of today. It was quite heavy, maybe about 10-15 pounds in weight. So we stuck our wireless thing on to it and the only applications back then were some quasi military applications. There were a few people curious about it in the big cities in New York and stuff , who wanted to replace it because they were running a lot of cable through conduits up and down high rise and they didn’t want to have so much cable and thought maybe wireless would be a solution. But it was not a broad enough solution.
So we actually raised $30 million, spent $3 million on the product and $27 million trying to create a market and on market research and trying to find new applications for this. Eventually like all good pioneers blazed a trail to death. Now ten years later there were many successful companies in that exact same market so we were a little early for our time.
So then I went off to work for MCD, Judy Estrin’s company for network computing devices. This was a company that was essentially building what I would call X Window terminals for Unix. Stayed there for 3 years and ended up at Netscape after that. That was in 1994, I was early at Netscape and then four and half years at Netscape through the great up cycle and then down cycle at the end when the company was in trouble because of Microsoft and because of how the business had changed, then went on to do Junglee after that which was 1997 or 1998 and then was bought by Amazon shortly thereafter. I ended up working with Jeff Bezos at Amazon, during the high growth years of Amazon.
That was an exhilarating ride. Again I had no premonition of things to come. I left the company at the end of 1999, at the beginning of January 2000 which is when I founded Sherpalo. I had made the investment in Google while I was still at beginning of Junglee is when I made the investment in Google.
Kamla: Netscape was the turning point in your life. What lessons did you learn from Netscape? Because people still recollect some of the rousing speeches you gave during your Netscape days to the sales and marketing force.
Ram: Lessons of Netscape were, one of how to build a high-growth company very rapidly and there were several days and nights where I remember staying at work till 2-3-4 in the morning and then coming home and then turning around and going back to work at 7 or 8 in the morning. You literally didn’t even want to leave work. And I had two young kids at the time so work was such a magnet. And the excitement of being able to hire so many young, smart people, who were flocking to it, and we were able to pick and choose the best and the brightest to come work for the company. Because it felt like a whole new opportunity, a whole new platform was being built. And in fact looking back, it is true that a whole new industry was built on the web and Netscape was the beginning of it, much like Fairchild Semiconductor was the beginning of the whole PC, micro processor revolution.
So what was it like? I think I learnt leadership skills there, I learnt time management skills there, I learnt the art of building relationships with large companies around the world and being able to deal with the management of those businesses, in doing multi-million dollar deals. Being able to manage through the brutal triage of the engineering projects and making sure that my voice was heard for- you know I’m the advocate of the customer. So for the things needed to be delivered for the customer, making sure that it was properly heard and supported, understanding how to compete in a fiercely competitive environment at that time against Microsoft ,which is heel of a lot of learning, perhaps the world’s smartest and toughest competitor. So being able to work with that and deal with that was quite a learning experience in itself. So there were a number of things.
Of course, learning to work with a growing management team, with the pulls and pressures of a rapid growth and managing that growth; all those were factors.
Then later on as the cycle turned against Netscape, being able to manage a company in the downturn is also a very interesting and different challenge. It is not as glorious as the challenge of building a fast growing business, but you know every thing that goes up will eventually either flatten out or either go down. If you’re not lucky or smart in how you manage it will eventually go down. Nothing is ever going to go up all the time. And you know just managing through business cycles gives you the pragmatism to think about how to manage spending, how to make sure that you are not building for a world of 30 percent month on month or year over year growth all the time because that is too rosy a world… that is not the real world.
Kamla: What do you think was going right for Netscape compared to your previous experiences with other startups that made you work those long hours in spite of having a young family? When you are working in startups the toll actually is on the family, which goes unnoticed at. It is only the family members know the toll they pay for their father or mother or whoever is working in a startup.
Ram: Exactly. You are right. I think what made the difference at Netscape were two things. One: working with lots of young, energetic, smart bright people that I was literally hiring myself. Because I walked in, we didn’t have revenue, we were building a product that hadn’t yet been released. So we had the opportunity on a clean slate to build this from the ground up, which was what I did . And that was a hell of a challenge and it’s a wonderful challenge to have because as you scale that up you’ve got tens of hundreds of people working in building this revenue stream and this opportunity. It’s a great feeling. So one was the people, the other was the size of the opportunity and the fact that I could taste the success. We could taste blood. That gives you an adrenalin rush like no other.
Kamla: Now you have tasted success for the second time with Google. What does that feel like?
You are listening to Ram Shriram of Sherpalo Ventures, tune back in for part 2 where Ram talks about his involvement with Google and Ram’s book of mistakes and why he invests in consumer facing companies. This is Kamla Bhatt and this interview was brought to you in association with Live Mint Radio. As always thank you for tuning in.