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Why Indian entrepreneurs succeed in US

By BusinessWeek
March 23, 2007 14:11 IST
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One-quarter of the U.S. publicly traded, venture capital-backed companies started in the past 15 years were founded by immigrant entrepreneurs, according to American Made: The Impact of Immigrant Entrepreneurs and Professionals on U.S. Competitiveness, a 2006 national survey commissioned by the National Venture Capital Assn.

The current market capitalization of these firms exceeds $500 billion, and they employ more than 220,000 people in the U.S. and 400,000 internationally. Immigrants have had the greatest impact in the fields of IT, life sciences, and particularly in the high-tech manufacturing sector, where 40% of publicly traded, venture-backed firms operating in the U.S. today were founded by immigrants.

This week, Smart Answers profiles two immigrant entrepreneurs.

Sai Gundavelli set out for the U.S. in 1986 from his native Hyderabad, India, with a small budget and a large dose of the immigrant dream. Although he was a college graduate, he bused tables and washed dishes until he won a scholarship and eventually earned a master's degree in mechanical engineering from the University of Oklahoma.

In 1991 he moved to the Bay Area with one goal: landing a job at Internet networking firm Cisco Systems Inc. After he worked at Cisco for five years, he cashed in his stock options to fund a series of successful entrepreneurial ventures, the latest being San Jose (Calif.)-based Solix Technologies, which he founded and where he currently serves as chief executive officer.

Gundavelli spoke recently to Smart Answers columnist Karen E. Klein. Edited excerpts of their conversation follow:

Asian Indian entrepreneurs have proven extraordinarily successful in the U.S. technology sector. Why is that?

Indian immigrants typically come from middle-class families, and they tend to be college graduates, many with particular expertise in science, engineering, or technology. They come to the United States to get graduate degrees and they are under a lot of pressure to see if they can take care of their parents and families back home.

The wealth in India is still controlled by a small percentage of the people in the country, so even if their parents are educated people, they may work in low-paying, civil service jobs.

There is no way it is possible to break the entrenched social system and the cultural barriers over there. When an immigrant comes here and sees that so many opportunities exist, he becomes quite ambitious.

You originally worked in engineering at Cisco Systems. When did you get the entrepreneurial bug?

Back in the old days, when I first came here, I just had a few dollars in my pocket. I worked in restaurants like a lot of immigrants, and I really didn't know what I wanted to do. I was naïve, but I saw quickly that this is a great country and a place where I could really do something.

Once I got to Cisco and saw the energy and the opportunities there, I thought, wow! I saw that the Internet would eventually go to every country, and I knew exciting things could really happen. Pretty soon I knew I wanted to be involved in it as an entrepreneur.

How did you start your first company?

I was at the right time and the right place, working for Cisco in the early 1990s. I stayed there close to five years and then my stock options helped me start a series of technology companies. Around 2000, when the market crashed and some people started going back to India, I felt I wasn't ready for that.

I knew I needed to shift direction, and I saw how much internal data was growing in enterprise organizations. It took me a couple of years to build the technology for enterprise data management, which is now the foundation for Solix Technologies.

What does the company do and how many employees do you have?

We provide a worldwide infrastructure platform to manage data across all segments of structured and unstructured enterprise data. So we help companies organize their data, improve their application performance, put their inactive data into storage, and improve the quality of their storage. We have 100 employees.

You're a charter member of The Indus Entrepreneurs ( What is that group and how has it helped you and other immigrants?

It's a networking association originally started by Indian entrepreneurs and engineers in Silicon Valley in 1992. The focus is on business development, support, providing education for future entrepreneurs, and giving back to the community.

It really has helped create energy, synergy, and a social system for Asian Indian immigrants and other entrepreneurs. They have 10,000 members in nine countries now, including England, South Africa, and Israel, and they're going beyond technology into other industries.

There's a lot of opposition -- maybe even a backlash -- to the practice of outsourcing and offshoring, which often employs people based in India. Does that come up in your business and social interactions?

Certainly. There is a fear mechanism working in the U.S. right now. When our economy went down, there was Lou Dobbs talking, and it created a lot of excitement. I'm not in the offshore game. I am creating value, creating jobs and employment here. The people I talk to get inspired by new ideas rather than by low costs or cutting costs.

What I do is psychologically ask myself: What am I doing? Am I helping society? Am I doing the right things in my business? It's too much for one individual to face and answer all these large societal questions.

What is the toughest part of being an Indian immigrant entrepreneur?

The communication piece is difficult, primarily because of my accent and being unable to mix in 100% with society. I sometimes wonder if that does come in between me and potential clients.

Since you came here 20 years ago, you've become a business and technology thought leader and you now do public speaking in many forums. What does your family think of you?

Most of my family is still in Hyderabad. They are very proud of what I've achieved. I have a younger brother here who works for Cisco, developing technology. He's more of a hard-core engineer, not an entrepreneur at heart.

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