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| Home - CEO Spotlight - Mar 04 Issue |
CEO Spotlight: Pushpendra Mohta, Vayusphere
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Angel Mehta: Vayusphere was founded during your time at Benchmark Capital as an EIR (entrepreneur in residence)… tell me a bit about what the EIR experience was like? What were some of the ideas you toyed with beyond Instant Messaging?
Pushpendra Mohta: Sure. Let me back up for a second in how I actually ended up at Benchmark. I had come to the U.S. in ’87 as a graduate student by the University of California in San Diego. Then around ’89, I had the opportunity to join a group of people at the university that were essentially building California’s Internet. It was one of the original Internet service providers, internet service for the state of California, the universities, the commercial institutions.
I left my PhD program behind to join this group of people to create a company called, “CERFnet”. We grew that business over time and then strategically decided that the best revenue opportunity for this business was to partner up with a telecom provider. In ’96, we sold it to Teleport Communications Group who was then the largest competitive local exchange carrier in the country. And in the couple of years there, I created a new business unit for Teleport in the data space; they were predominately a voice and fiber company before they acquired CERFnet. Then ultimately AT&T acquired both Teleport and CERFnet in ’98 so I spent two years at AT&T launching the Web hosting business and the global IP backbone business which are now among the fastest growing revenue segments. Eventually I just had this desire to get back to my entrepreneurial roots…and that’s when Andy Rachleff at Benchmark invited me to join them as an EIR in early 2000.
The whole EIR thing… I think it’s now become a fashionable title… Basically to me, the EIR is a place to hang your hat while you think of what you’re going to do next. The context and the surroundings play an important role in order to provide you with a structured way of doing that. It’s a place surrounded by not only the investment professionals at the VC firm, but also essentially the foot traffic, if you will, who come through the venture firm every day. Interesting, capable, innovative people coming in and presenting ideas all day long. So it’s an opportunity to essentially reset whatever expectations you might have had about what you were going to do and research some new ideas. I did not go to Benchmark Capital with a preconceived notion of what the next big thing might be otherwise it would have been very easy for me to fall back into telecom. One of two things can happen when you are an EIR, you join a team that the VC is interested in, or you develop your own idea. I did the latter. We were able to convince Marc Andreessen, co-founder of Netscape and Opsware to invest and join our board as well.
Angel Mehta: How has Vayusphere deviated from it’s original plan or changed – from a strategy or structural perspective – since it’s founding?
Pushpendra Mohta: Vayusphere today is the same company only in name. When we first started in 2000 the main thing Vayusphere was going to do was to offer its services as a hosted service provider. In retrospect, we over-estimated what would happen in the wireless messaging space in the short-term. So when Vayusphere first started, it was going to offer a set of reliable hosted messaging services - connecting applications to people with a strong emphasis on wireless and mobility. A couple of things happened along the way. In the first 12 to 18 months of Vayusphere’s history it became clear that (1) it was too early to offer seamless wireless services to U.S. wireless networks – who were just not investing aggressively enough to deploy data services. And (2) the investor appetite to invest in service provider companies just sort of vanished.
For both of those reasons – the market was too early and the absence of capital – we had to change paths. Of course, this was in the aftermath of the market correction… the dotcom crash… where service providers were losing their shirts.
So investor appetite disappeared, and we had the choice of either calling it quits or taking whatever intellectual capital we had created and re-starting the company. The most difficult time at Vayusphere was the first 18 months. Over the last 18 months, we turned the company around, bought it back from original investors, and converted it from being a service provider business to a pure enterprise software business, which was a big change from where we had started.
We’re now at the point where we are shipping product to Fortune 500 customers – yet we’re back to being a seed-stage company from the perspective of capitalization. We’re early stage with regards to capitalization, but later stage with regards to product.
Angel Mehta: Do you remember any instances over the last few years where Vayusphere profited from purely coincidental events?
Pushpendra Mohta: Luck favors the prepared mind. If you’re prepared to take opportunities as they arise you have to be constantly in that frame of mind. I don’t recall any thing that came out of left field that we weren’t prepared for – when we saw traction, we were prepared to take advantage of it.
Angel Mehta: One of the common questions I get from a lot of first-time CEOs or entrepreneurs is how much time to spend on figuring out whether any given decision is right or wrong before you make it. In other words, how much energy do you spend in the analysis phase? How do you know whether anything you’re doing is right or wrong?
Pushpendra Mohta: You don’t ever know if something you are doing is right or wrong. I think you want to take into account the information available to you – I mean, it would be foolish not to. Do you want to eliminate some risk from the process? Yes. But you don’t want to sweat over it endlessly. You don’t want to get into analysis/paralysis situation, but prudently you take into account what facts are available to you and based on the information and assets available to you you play your best card. The hand might change over time and then you change your strategy – just as long as at any given time you know what you have, what you’re holding.
Leading a start-up company requires tremendous resolve, because you’re dealing with ambiguity. You need to get your people comfortable with ambiguity, and you need to get comfortable with it yourself.
Pushpendra Mohta founded Vayusphere in July 2000 while he was an entrepreneur in residence at Benchmark Capital. Push spent many years as a senior Internet executive at AT&T and the Teleport Communications Group (TCG), following the acquisition of his first company, CERFnet, a national ISP, by TCG and its subsequent merger with AT&T. Feedback on the interview can be sent to: pushp@vayusphere.com
Angel Mehta is Managing Director at Sterling-Hoffman, a retained executive search firm focused on VP Sales, VP Marketing, and CEO searches for enterprise software companies. He can be reached for feedback at: amehta@sterlinghoffman.net
 
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