Kamla: This is Kamla Bhatt. Today my guest is Yogen Dalal, who is Managing Director, at Mayfield Fund, a venture capital firm located in Silicon Valley.
Mayfield currently manages over $ 2 billion and has invested in 500 companies out of which 100 went public. Mayfield is also active in India and has invested in a handful of companies there.
Yogen has been in Silicon Valley since the 1970s and worked with Vint Cerf, the father of internet at Stanford and co-authored the specification for Internet Transmission Control Program or TCP. Yogen was a founding member of the Claris Corporation and Metaphor Computer Systems and prior to that, he worked at Zee Rock’s Park. He’s currently on the boards of Naunce, Revenue Science, Audiofeast and others.
Yogen has a PhD from Stanford and has an undergrad degree from IIT, Mumbai. Welcome to the show, Yogen.
Yogen: Thank you Kamla. Always nice to talk to you and get your perspectives on the world.
Kamla: Today I’m going to get your perspectives and the valley. What is the magic of Silicon Valley?
Yogen: Well, the magic is of Silicon Valley is that you have people who want to change the world- people who come with fresh ideas and are who are given the opportunity to live their dreams. But the true magic of Silicon Valley is that failure is not viewed as something negative.
Kamla: Can this magic be re-created in other parts of the world?
Yogen: People have tried to do that and in some cases, its been successful but I don’t think there’s any other place like Silicon Valley because Silicon Valley has been built now for over 30-40 years. It’s a culture; it’s a way of thinking. There are so many different people who are all trying to change the world that it’s a melting pot of ideas where one idea leads to another purely by accident.
Kamla: So you came here in ’72 and just a year before that the term “Silicon Valley” had been coined.
Yogen: That’s right. I think the whole notion was that somebody, a Fred Terman who was the Dean of Engineering at Stanford had this dream that industry and academia work together and many of his students were the ones that helped create what we now think of the Silicon Valley, particularly Hewlett & Packard who were one of the first true entrepreneurs of this Valley along with many other people. And Silicon Valley owes its term for the fact that it really was the electronics capital of the world where chips and semi-conductors and electronics were being designed. Now we think of Silicon Valley as Google and Yahoo and Apple Computer and variety of other companies like Cisco.
Kamla: You missed out on Facebook.
Yogen: Well, clearly Facebook is the next company being created but the point I was making is that we’ve moved away from Silicon to what we now think of as Internet Media. And the vibrancy of the Valley is that it keeps on re-inventing itself from building electronics to building chips to building routers, now to building experiences that each and every one of us want.
Kamla: Let’s stay with the 70s. You were part of Vint Cerf who just became a professor in ’73. He was a fresh grad and you were involved with him in creating TCP. What made you take that fork on the road as Yogi Berra would say, and work with Vint?
Yogen: Two things. You know when you meet somebody who is truly remarkable as we’ve discovered he is, he just was inspirational the first day I met him. But I, as an undergraduate of IIT Bombay was fascinated by this whole notion that computers were more than just machines where you solved complex equations and the notion that computers could communicate with each other and that we as individuals, could use computers to communicate with each other was just fascinating. And so when I read all the work he had done on the Arpanet, I knew this was the person that I wanted to hitch my wagon to.
Kamla: What has surprised you about the growth of the internet?
Yogen: Well, the growth of the internet is that it’s unstoppable. It’s one of these standards that continues to evolve; it’s an organic system, not controlled by any one company. You might say that Google controls one aspect of what people want from search but the fact is that the technology underlines the internet that can be constantly improved upon by any one who knows how to make it better.
Kamla: Let’s switch to apple because after Stanford, you went to Xerox Parc and then you went to Apple and you were a part of ClarisWorks where you were with Bill Campbell who is regarded as the coach of Silicon Valley CEOs. What was it like working at Apple because it is one of the companies that had tremendous ups and downs.
Yogen: Well, you know I helped Bill start Claris in 1987 which in some ways was a spin-off out of Apple even though in many ways regarded as a wholly owned subsidiary that Apple eventually bought. But Bill Campbell is exactly as everybody says. He is the ultimate coach. He knows how to motivate people. He’s a brilliant marketer and for me, it was the first time in my career that I went from being a purely technologist to somebody who was building products that would have mass market appeal. In this case, application software for the Macintosh. So I’ve just always been a big believer that Apple is one company in the world that will constantly transform the world. Even though it’s had some bad times in the past, it’s managed to survive them because the fundamental notion that the people at Apple know what it is that consumers want has not changed ever since Steve Jobs started at Apple way back in the late ‘70s.
Kamla: Are there times when you look at it and wonder what is it that this company is doing right and how is it that they are able to change course and correctc ourse so frequently?
Yogen: Well, I think what Apple really stands for is excellence- excellence in terms of the user experience. I mean, they are masters at making sure that all the details are right.
So when you as a consumer want to buy something; whether it’s a car or something else you want it to be perfect. You want it to work the way you want it to work and Apple, over the years has just discovered what does it mean to build a wonderful operating system whether it is Mac OS X or build an ipod or build an iphone. So they’ve got people there who truly understand why details matter and why the consumer would be happy with the final product.
Kamla: What was your experience like working with ClarisWorks?
Yogen: Well, you know Claris Works was an integrated application. We had some brilliant software engineers who wanted to take things like word processing, drawing, and painting and just combine them into one application. And today, ClarisWorks is often, is called I believe, Apple Works.
Kamla: It died in the last year.
Yogen: It died last year? Well, I think the reason it probably hasn’t survived the new era is that today people are quite comfortable with many of the applications from Microsoft for Macintosh but also the internet and the web has come to play where people are able to get some of these simple applications through their browser.
So if you wanted to write a simple document, you don’t even need Microsoft word. You could use Googledocs or a number of other applications straight from your browser. So that need- that people want is being satisfied in just as simple ways from State-of-the-art methodologies.
Kamla: What prompted you to become a venture capitalist?
Yogen: As I often tell people, by accident. I was in between careers so to speak after the Claris’ experience and I had known the Mayfield partners and they asked me to come hang out at their offices and help them think about where the world was going and this was in ’91 when Windows had just come world was ready for client server computing which is what I had spent many of my years doing at Xerox and at Metaphor. So I was able to help them think through their strategies and we made some superb investments and eventually they asked me whether I truly wanted to be an entrepreneur and go back out or whether I wanted to cross the line and help entrepreneurs; I didn’t know whether I’d like it or whether I’d be any good at it and I said yes and something I’ve done many times in my life, sort of gone with my instinct on where I think the world was going and what role I might play in it and I’ve never regretted that decision.
Kamla: What you didn’t mention was what were these companies that you invested in?
Yogen: Ah! The companies that I invested in, in those early days along with my partners were Vantive Systems, which was one of the first companies to do customer resource management, Arbor Software, companies like Pure Software or further down the road companies like TIBCO, BroadVision; these are all what I would call infrastructure software companies that continue to march along the path from client server to web services.
Kamla: You have deep knowledge of the network space. IPv6 is round the corner. What that means is, there’s going to be IP addresses available for billions of devices. What that means, I’m guessing is proliferation of devices and experience then becomes the focal point. How are you looking at IPv6?
Yogen: See, in many ways the changes that will come with IPv6 is to really enable, as you said Kamla, thousands and thousands of devices to become internet enabled where they would have an address. Well, it’s like saying if you don’t have enough street numbers, you can’t add any more houses to the street and we want to make sure that you can add as many devices as you want to.
Now technologically, doing IPv 6 is fine but the question is, what are these IP devices going to do? Are they going to be phones, are they going to be MP3 players? Are they going to be digital picture frames? We just don’t know but the point is to make sure that there are enough street addresses so that the innovators, the entrepreneurs can figure out what these devices might be.
And then consumers will benefit from these devices and not only consumers you can think of street lights, traffic signal, every thing is going to be an IP device and the ones that really succeed are the ones like the iphone or the ipod where it meets customer needs – consumer needs.
Kamla: I’m curious. Why didn’t you mention the Ad network?
Yogen: Ad networks are very very important and I think the world eventually is all about commerce and we know whether we are living in the United States or Europe or China or India that advertising makes the world go round. Most of us sometimes get annoyed by ads but I think we are willing to live with ads because the benefit of that is that the service that we get is for free and so there’s this constant tension between “for free” and “for subscription”. But what the internet has done is, it’s created a very unique mechanism to allow the smallest company to get world wide distribution. All you have to do is type some random phrase in a Google search box and you can find that small company that will satisfy your need.
Kamla: So personalisation becomes the key phrase there.
Yogen: “Personalisation” is the key phrase that the ad networks and the internet will eventually give you ads that you really want as opposed to ads that are irritating you.
Kamla: So that brings up the question of privacy.
Yogen: All technology has dealt with the issue of privacy. You know, privacy of what you do, what you don’t do and I think that’s a constant set of hecks and balances that the industry will create to ensure that privacy is upheld. But today, for example if you wipe your credit card, your credit card company knows exactly what you’ve bought. So it that a violation of privacy?
Only if the organisation that you’ve trusted misuses that information and I think there is sometimes that concern that companies on the internet aren’t quite as crisp in terms of protecting the consumers’ privacy and I think there will be technology and a variety of other mechanisms, not necessarily legislation which will protect the consumer.
Kamla: I want to switch to Judy Estrein, who is an old friend of yours. You have invested in her companies. She was the CTO of Cisco and she has recently published a new book, “Closing the innovation gap” and one of the things that she points out in the book is that the innovation eco system in Silicon Valley is polluted; both in the US and Silicon Valley. She says that the roots of the innovation system have started to rot. What are your thoughts?
Yogen: Well, innovation is something that is critical for the survival of not only Silicon Valley but also I would say, inevitably the American economy and so the worry that Judy has trailed in her recent book is expressing through interviews with a number of innovators is that we continue to feed the goose that’s laying the golden egg.
That is we have to construct mechanisms to enable innovation to survive. Otherwise, people look for short term gains and profits and don’t spend their careers building truly innovative technologies.
So we have to construct a mechanism by which researchers at the greatest Universities are given the freedom to doing the research. When you think about all the stuff we have today, it was done by researchers funded by DOWPA, NSF, at the research labs that I worked with at for years in the ‘70s before any of this really came in to public attention. And siting Judy is basically creating a “call of to action” that govts, Universities, Presidents and that corporations should pay attention to innovation long term and innovation across all disciplines, just not the discipline that’s core to their business needs.
Kamla: Tune back in for Part 2 of our conversation with Yogen. This is Kamla Bhatt. This interview was brought to you in association with Live Mint Radio and as always, thank you for tuning in.