 If we go back to the history at IIT Bombay, you will recall Professor Vasi mentioned that encouraging entrepreneurship has been an ambition for many years. This ambition was fuelled by the successes of many of our past students who picked up entrepreneurship as an activity rather than taking up jobs. Many of them picked up entrepreneurship as a choice after going to U.S., getting a degree, typically doing a B-take here, doing masters there, working for a few years and then taking up entrepreneurship as an activity. And many of them have been trying to inculcate that spirit across the country, even otherwise through the interaction that some of our faculty members had with them. There was this feeling that we should actually encourage entrepreneurship actively through some promotional activities and by setting up some kind of a cell here. The original ideas were S&T parks, you know science and technology parks which was the common thing. We even thought of creating one across the pipeline in our campus where we have some free space. We are still thinking of doing that. But nothing concrete had emerged. In the Department of Computer Science, meanwhile in 96, 97 there was another debate that was raging and that debate related to the need to emphasize the applied side of computer science. As you know traditionally the computer science or computer science and engineering syllabi, the world over, concentrate on internals of computers. So you have theory, you have architecture, you have operating systems, you have compilers, you have databases but database engine. What people do with all these tools is generally not a part of the computer science research agenda of any research institution in computer science. Typically there are a few individuals from within the computer science department who work closely with researchers in other fields where the computers are required to be used. So whether it is mechatronics or robotics as was known those days or whether it was signal and image processing as was known to electrical engineering people or whether it was chemical plant simulation and optimization as was known to the chemical engineering people or whether it was finite element analysis which was used heavily by all structural people in civil engineering or wherever. Those people used to carry out applied research and very few if any from the computer science discipline per se would be actively participate. Many of us felt that that is not correct. It is important to actually do active research in the applied part of the computers as well and we were trying to recruit faculty in areas which will focus on the applications. It was not very easy because the ethos of a computer science and engineering department academically insist that everybody should have something to do with core. In fact some of us realize that this vertical partitioning of education is not permitting interaction between people from different disciplines for doing cutting edge research. They would collaborate here and there. You would have noticed it even in your own fields. For example students of computer science in your own colleges would generally not appreciate the importance of learning principles of mechanical engineering or civil engineering as much as the five year program engineers used to do at one time. There is a difference there and this difference was getting accentuated. Just before that the school of management was established in IIT few years before that and the notion of a school as an entity which engages only in post graduate education and in research was fairly well established. So some of us, Professor Sarda, myself and a few others, proposed that we should set up a school which will focus on the applications and applied side of the research. And in order to name it slightly different from the computer science we said we will call it school of information technology because information technology by then was an accepted phrase. At one time you will recall there was no information technology. In fact even computer science undergraduate programs in this country started only in early 80s. Till then there were only MTech programs in computer science. At my time as a matter of fact in late 60s when I came here or till early 70s there was not even a computer science MTech. There used to be an MTech in electrical engineering with specialization in computers, controls, instrumentation, etcetera. So this is of course the history. And as again was mentioned the IIT boom was actually almost at its peak in 96, 97, 98 and we thought we could sort of ride upon it because the need was felt for applied education. In India we have this program called Master of Computer Applications. I think somebody is there who is an MCA student here. So Master of Computer Application was actually introduced to focus on the applied side more on the software systems and so on. When we mooted this idea the then director Professor Sukhat May said looks like a good idea but ensue not have any money to support such an idea. You will recall that in 91 when the nation embraced free market economy it also put a spanner on the funding of the institutions like IITs. Earlier the IIT money used to be given based on the budget and therefore based on the projected activities. In 94 the government announced that henceforth a fixed amount annually will be given. Now you run your existing programs, pay your salaries or run new program whatever you want. Which means effectively that initiatives different from whatever was going on was not feasible to be supported. So the idea of setting up a separate school was considered to be a good idea at least in the leadership. But we were told very plainly that there will be zero money available. So we said we will try and raise funds for this activity. I had just finished my term as Dean of Resources although I had not succeeded in generating lot of resources but I had set up a strong alumni network and it was very obvious to me that all of our alumni have a very strong feelings for the institution. They are a great soft corner. This would be true by the way the alumni of any institution. Like all of us would recall fondly the days when we studied in a college. It is just that that feeling is never translated into actual action because we all become busy in our own way of life and sadly the institutions become busy in themselves and they forget us. So we had tried to bridge that gap. We had built a good alumni network and we said we will try getting some funding from the alumni. This is the backdrop. In the school of IT I had two very I would say important things in my mind apart from carrying out post graduate education and R and D in applied computer science. It should also initiate things which we pursued were important in the long term. One of which was business incubation and the other was distance education because we felt that the skills which are required in the faculty training in the student training are so enormous that unless we exploit this new technology we will not be able to match those skills. Just as an aside recall that if we conduct a QIP program some of you would have attended those QIP programs or take a program like this. Not more than 20 25 30 people at one time can actually leave their place of work and go all the way away. So unless you take the education to wherever people are you will not be able to address this 25 30 people by the way was perfectly all right when we had about 50 to 70 Indian colleges. So about five IITs running such programs every summer or winter was adequate but when you are 2000 Indian colleges and when the number of faculty teaching these students more than two million students is roughly 100,000 there is no way you can reach even a minuscule percentage of them through the convention. One of the reasons why we by the way are capturing this audio visual recording and circulating it under open source is so that this material can reach people. But anyway so these two were the initiatives that we wanted. This we were discussing around 1996-97. 98 was an important year because 98 the institute students started an activity called TechFest or Technical Festival. Some of you might have heard of this. Technical festival is now almost the Asia's largest event. About 30,000 engineering students come from all over the country and rest of the world to IIT Bombay today. That time it was a early event sort of. It is essentially technical competitions, technical quizzes, technical showcases, lectures, etc. There were couple of initiatives woven around TechFest. One was called the inspirations, the other was called Eureka. Eureka was a business plan competition. Today business plan competition is a almost a common name, common now. Everybody knows. Everybody conducts business plan competition. IIMs do that very effectively. But in those days it was a novel thing for a technology institution to undertake. So we said we will have business plan competitions which will emphasize technology innovation. Whether it is development of a product or modification of a product or any process or something using cutting edge technology and how to build business around it. So that team was working towards this 1998 TechFest and when I said I am interested in this kind of activity so I was part of that Eureka activity then. My colleague Professor Chandorkar from Electrical Engineering Department was spearheading the whole TechFest team. In fact we call it a dream team. I have actually taken a photograph of this photo and I am including it in the course material along with the names. These are the people involved. In fact the right most person whom you may briefly see is Kashyap Deora who along with Maizhu's CEO Roshan De Silva whom you met where the CEOs of the first two companies admitted to our incubator later. At this time there was no incubator. They were just spearheading that activity and the TechFest actually conducted the first business plan competition based on the technology products in 1998. During that time I was busy gathering support for the idea of setting up a school along with these initiatives when one of our distinguished alumni Kamal Rekhi came here. Some of you would have heard his name. He was an entrepreneur. In the early days of networking he set up a company called Excelan. So all of us are familiar with network interface cards today. I mean network interface card does not as a matter of fact even come as a separate product is integrated into the motherboard of most of the systems. But I am talking about the days when the networking was in its infancy. So he built that company produced those network interface cards that company was taken over by Novel. He became CTO of Novel then and later on he became a venture capitalist. He and some of his colleagues who were successful entrepreneurs in the Bay Area had set up an organization called TAI. TAI stands for the Indus Entrepreneur. So they said in the Indus region they deliberately did not name it India. It is not India. It is called Indus. And the purpose is as follows. They said that we will cross geographical boundaries to define this Indus region. So right from Iran, Afghanistan, Pakistan, Bangladesh, Sri Lanka, Nepal, India, all these people here they believed that somehow since most of them came from this region they believed that they must take this message to people of origin from the Indus region and convert them into entrepreneur. In fact their objective was very simple, stated in simple words, take every Indian, inject a dose of entrepreneurship and convert that person into an entrepreneur. That is the ambition. Even today they continue with that ambition. This was set up in Bay Area and there were many people who were the sort of founding fathers. Kamal was one of them. You might have heard the name of Dr. Suhas Patil, another entrepreneur. He was actually a faculty member like many of us after doing his PhD. But he set up an electronic, what should I say, chip design company, led it successfully. And most of these people by the time 96, 97, 98 came, they had started this enterprise where they were mentoring individuals who wanted to set up companies. So this activity was happening in Bay Area. 98 January, Kamal Rekhi came to India, came to IIT. He had come here earlier in 94 and at that time he had indicated a great displeasure saying why are my hostels in a dilapidated condition. We tried to tell him that look the funding has suddenly been squeezed. So we can merely run our existing program but we don't have money to either start new ones or to maintain the infrastructure well. And he was a bit upset. So in 98 when he came he offered a small donation just to take care of a few things like library and so on. And at that time I happened to talk to him about the idea of the school of IIT. He was not so much interested in the school of IIT in terms of the academic progress. But he was immensely interested in one of the two initiatives namely business incubation. So he immediately said if you start business incubation I'll give you a million dollars of matching grant. And I told him I can't start the business incubator unless there is a school of IIT. So he thought for a while he says alright I will give that million dollars in the name of the school but you must use it to ensure that the business incubation activity starts. A million dollars in those days by the way was a very large sum. A dollar still goes a long way now. It went long way then. More importantly it was the first major donation offer from anyone of our alumni to IIT Bombay then. Nowadays of course most of the people who have established channels of communication and so on. And we get a lot of funding but that was the first major offer. With that then I piloted the proposal of school in the institute CNET. And very interesting I wanted to take a sabbatical leave to move around the country to visit engineering colleges which I did in 2002 later. But 98 when I applied for the sabbatical for Sukhatme said your proposal is pending in the CNET. If CNET throws out that proposal you go and take your sabbatical leave. If CNET approves it you better be here and set up the school. So that was the condition. Professor Sarada my colleague who will be talking to you tomorrow was appointed by the CNET as the chairperson of that committee. Committee comprised of four or five faculty members from here head of the school of management and some other professors. Two external experts one Ashank Desai who is the creator of Maastec, an IT company many of you might have heard. He is the chairman of Maastec even now. And Dr. Anand Despande who is the chairman and managing director of a company called Persistent Systems in Pune. Both are IT companies. And the committee deliberated for almost two months figuring out what to do etcetera etcetera. And the report that they prepared was a very detailed report. They all endorse such a requirement. And you should see the kind of maramari that we have or the fighting that we have over trivial issues in arithmetic. I just give you two glimpses. One is what should be the size of a faculty office. Traditionally in IIT a faculty office is 10 by 10. Because 10 by 10 a 10 feet by 30 feet is the size of a bay in a large shed in a lab. And typically at the corner portion of that bay would be the faculty cabins. So in a 10 by 30 thing there will be three faculty cabins. And faculty members used to sit in the lab. It was an unknown notion in 50s and 60s that faculty members would have nice cabins and so on. Air conditioning was unheard of. I insisted on a size of 30 at 300 square feet not 100 square feet. The argument and I was supported then by Professor Vasi was not a deputy director but was a professor then. And his argument was that look faculty members spent half their lifetime in their offices. Only their families live full time in homes. So if they spend half their lifetime in offices should we not make offices as comfortable as homes. So the then dean planning who was to weigh the judgments then he did an arithmetic average and says all right 200 square feet. So you'll find in this building all offices are 200 square feet office. It's better than 100 square feet but not as good as Tihal. Then the total area how much should be the total area that is required. So the total area requirement I said a minimum 50,000 square feet. And the dean planning said no not more than 25,000 square feet. So again Professor Sada as chairman did the arithmetical mean magic and came up with 36,000 square feet as the requirement for this school. The committee report was submitted to Senate. Senate argued about it. Senate approved it on one condition. No money from IIT's budget should be spent on this. Otherwise we are okay with this. So I had the task of having only one million dollar promised. The requirement of funding was to my mind I would require more than 50,000 square feet. I would create a lot of corpus funds to support faculty research, travel, student scholarship etc etc. And I said I would I would need about 16 crore rupees. Those days dollar was about 40 rupees almost same as it is now. He says 16 crore rupees is what I would require. And I had one million dollars. Four crore rupees promise. I had to still generate matching funds. This was a matching grant. It's not an absolute grant. But the Senate approved this. The board approved it. And I went in September to meet Kamal Rekhi. And I still remember that meeting where I went with our alumna association President Mr. Anil Kshar Sagar. And now we explained to him, we thanked him. What the board had done by the way in the meanwhile was to acknowledge his contribution because that was the largest contribution ever seen by IIT. The board chairman, Professor M. G. K. Menon had so much suggested in the board that we should name the school after Kamal Rekhi. So that is how the school name came to be Kamal Rekhi's school of IIT. We went and told him he was very happy. He says, although that was not the purpose of my giving this donation. But anyway, I am happy. And when we got to discuss this, I kept mentioning that we will start with a small building and then we will eventually grow, etc. Because we need 16 crore rupees. He listened to us for two minutes and then suddenly asked Anil Kshar Sagar, you know, Parthak is mentioning 16 crore, 16 crore. What is this 16 crore? How much is that? Anil promptly translated it to say four million dollars. That is the first time he understood that the reason why I am saying small, he asked me. So since I am giving you a million dollar matching grant, that means you will have only two million at best. Is that the reason why you want to start small? I said yes. Will my incubator suffer? I said no, we will start it. Then he thought for a second and impulsively said no, Professor Parthak, we want IIT Bombay to build the best of breed infrastructure. Don't compromise. I will give you two million dollar matching. You generate another two million, but don't compromise. This is the kind of goodwill that the Institute has been able to create amongst at least some. I still had a problem. I had only promised money because his condition was show me a matching dollar and spend that dollar. He had given all of his two million dollars to Heritage Fund, which was the funding part of the Alumnus in the U.S. The fund had cash, but the fund had no permission to use that money unless I generated the other. Then I got a call from my friend, Narayan Murthy of Infosys, who had actually done something about funding for some programs in computer science in IIT Kanpur because he was from IIT Kanpur. Although nobody in IIT Kanpur would talk about how much funding he has given. I came to know later that he had put a embargo on them talking about his funding. He called me saying Deepak Nandan would like to do something. I said, that's wonderful. So I talked to Nandan in the first week of January 99, I remember. And he says, I thought he wants, since I had no clue about the kind of quantum they wanted to donate, I thought he will give some chair or something like that. And when I called him, I was very pleasantly surprised when I said, I want to give one million dollars. So I said, one million dollars. He says, yes, I want to match whatever Kamal did. Quite inadvertently, I ended up telling him, oh, but Kamal is giving two million. And then he said, oh, and then waited for some time. And I got really scared. I mean, I said, no, no, Nandan, one million is okay. And then he says, no, no, no, let me think about it. Believe me, that night I could not sleep. Because if that fellow goes back and says, I'm not giving anything, I'm stuck. He came back two days later, apparently discussed with Rohini's wife, whatever, because these donations are from personal money. It's not Infosys money or anything. And Nandan called. He says, no, no, no, I have decided to match Kamal. So if he gives two million, I'm also giving two million. Within about 10 days, the Infosys shares were given to IIT Bombay. They helped us sell them because IIT cannot hold shares as a government institution. So we had to discharge those shares. We got money. And that is how you see this building. In 98, after the school was established, I started both setting up the academic programs, the incubator and distance education program. Distance education program required a detailed evaluation of VSAT technologies and so on, which were just coming up then. It took some time. But to the incubator, I said, I'll start the incubator immediate. So in 1999, when we admitted the first batch of students, we were given six faculty rooms, two classrooms, and some office space in the annex of the computational department in the old maths building. Since I had only three faculty members, I had three rooms free. So I converted two of the faculty rooms, the great 10 by 10 rooms into incubator. And I announced the beginning of a pilot incubator. That is when we were doing the evaluation, as I said, about the proposals and so on came in. Kashyap's proposal was backed by suggestions from Rakesh Mathur, who was his mentor. You might not have heard of Rakesh Mathur. Rakesh was the creator of Jungly. Have you heard of a startup called Jungly? It was sold to Amazon later. After Yahoo Jungly, I mean, those of you who have seen the Jungly movie would recall these terms. They had set up a Jungly. He made a lot of money in Jungly, which he has been spending in setting up various serial enterprises. He still has an incubating company we just exited recently called Weberu from IIT, Bombay. Those days, he said, okay, I will be mentoring him, though there was no promise of any funding or something at that time. And the second was Roshan Desilva's company, Mysews, which had won the top award in our own competition, the product competition, Yureka. There were about 25 applications which we had shortlisted in the first round out of about 150 that we got. You must go back to those days. Every Tom Dick and Harry wanted to set up an IIT company. Those were the days of anybody and everybody. And most of the people believed that you generally set up some website and money will pour in. It took quite some time to people to figure out that doesn't happen that way. That was the ethos. So these two companies were promptly given space there. There is no formalism of any kind available. It was clear that even my modified proposal, not to charge them any monthly rental, but to hold some stake in that company could not be implemented for two simple reasons. One, the companies themselves did not exist as proper entities. Nobody knew amongst the students what to set up a proper company, register rate and whatever whatever. They were in the process of doing. Second, IIT Bombay as I said had no mechanism to hold stock. My idea was that I will charge some 3% stock or 6% stock or 5% stock or something like that. And which they were very glad to give, but there is no way. IIT Bombay can't hold it. I can't hold it first. Nobody can hold it. So what does one do? Fortunately, both these startup companies where IIT Bombay alumni started companies. So I invoke the traditional Indian teacher's role. I said, you give me a word of honor that in future whenever a formal mechanism is set up, you will either give this share or you will donate the equivalent of this money to IIT Bombay or whichever is the agency. They agree. Can you imagine doing this formally whenever you are using money which is given by a government institution? It would be very difficult. Department of Science and Technology, any other department, any other government agency will ask you for your defined processes, will ask you for whatever your legal terms. Fortunately, today you have such definitions of processes and it is possible to set things up. In 98, there is nothing. Why I'm telling you all this is that there are occasions. If not this, there'll be something else which you may not be able to fulfill when you are in the early days of setting up the incubator. You have to find out some novel ways and you have to find out that if there are no rules, you don't care, but you still start with it. After all, I said it's a pilot. The reason Institute supported me was two-four. One, a genuine faith in the idea and in the objectives from the entire leadership of the institution. The then Director Prasad Sukhatmay, Deputy Director, other deans and even later when Prasad Ashok Misra joined as director and the other deans, they have always said yes, this idea is correct. The second is there is no government funding involved. In fact, I specifically asked Kamal as to what are his conditions for spending this two million dollars and his answer was a typical of a good venture capitalist. He asked me who is going to set up the school. So I said I have been appointed the head. He says you got three years. In three years you show me something world-class happening. Otherwise I shall have a strong private word with you. This is my only condition. I don't want to put any other condition. I think IIT Bombay has enough wisdom to spend that money wisely and it has enough processes and checks and balances so I have nothing else to do. You don't get this kind of freedom easily. You certainly don't get this kind of freedom from government agency. It is also wrong to expect that kind of freedom because they have their own rules. I am not suggesting that it is a precondition to set up a successful incubator to have large amount of free money to come off it. Why? Because even if this money was not coming we were still committed to start this activity anyway. As a matter of fact I did not use any one of this funding for the incubator. I used one crore rupees of Nandan's funding to set up the incubator. The rest of the money was used to build up the infrastructure to set up other endowments and so on as I said. Out of that one crore rupees 70 lakh rupees or 65 lakh rupees have been given back to sign after sign was established. The money required was not very large. How wisely you spend that money is what is important. The pilot started growing because there was a pressure for more people wanting to get in. We did not have space in the because meanwhile more faculty members had joined and as a matter of fact within two months another faculty member was to come and one of the two companies had to exit or move out somewhere. So I went around the department saying will somebody give me space? Why should anybody give you space? In your own infrastructure how easy do you think it is to go to some other head of the other department say please give me five rooms for one year will you get that? Not easy. In Mumbai people don't even give up the place of footpath if they have occupied it for sleeping in the night. So giving a built-up space was absolutely impossible. Then I offered a shop. I said I want a lab space which I am going to convert into these five or six cabins. There will be air condition there will be furnished and they will all have PCs in those rooms. If you give me place for one year I will leave all of that behind. Now that appeared attractive to physics department who were not getting enough computer purchase grant enough air conditioning grant so they said we will give you space. I had asked for some 600 square feet they said no we will give you 1000 square feet and you must buy more pieces and leave all of them with us. So the head of the physics department and some few professors negotiated a good deal. Professor Puntambekar was the head physics then Professor Deepan Ghosh was our deputy director till recently was the person who told the head to give me more space than what I asked for. But this was a good internal negotiation and Arvind Patil whom you will be meeting shortly he will be telling you how the initial infrastructure etc setup he actually set that up in record time along with some of my project assistants and so on. Within four months we could shift these two companies there and we could admit more companies. Meanwhile the construction of this building was coming up again Arvind Patil was in charge of this infrastructure creation. Even in this infrastructure creation we had a problem. Traditionally our buildings have to come through what you call the PWD approved rules which typically means the lowest tender and so on. And we went to the our building and works committee and said that look we are not spending any government money in it. We do want to follow the same processes but permit us to choose the best constructing agencies. Amongst them whosoever is the lowest will award the court. They actually agree. So it was like Shapurji Palanjee, L&T and one or two more companies whom we asked for this construction. The lowest bid was by Larsen and Tobu and we said you construct. So you can see the structural construction the L&T engineer was on site. He was so proud he took me towards the end and showed me a big pillar that you see there. He says sir we have given a guarantee of 60 years for this construction to last but I am telling you it will last for 75 years. I jokingly told him neither you nor I will be there. He says no your grandson will be there ask him to meet my grandson then. There is a level of confidence and pride that they have and that is the advantage. We were aware that when we choose one of the best agencies in the country we will end up spending 15 to 20 percent more money than what an L1 thing would do. But you will all agree that an L1 construction would probably disappear in 20 years. Now that's a difference that you have to somehow find ways to do it. Another person who has done it using government money not necessarily in the context of business incubator but in terms of the infrastructure for the institution is one Prasad Tiwari in a place called Allahabad where Indian Institute of Information Technology triple IT Allahabad is situated. I went and saw that the entire money is funded by the government but he went to his board and got the same permission saying we want to construct the best of the breed thing and he got the permission. So the government is not you know necessarily against good quality. The government only wants that you follow properly defined processes and execute. Anyway I digress a bit. So coming back to this incubation then there was a problem. I was also learning. I had only read about these incubators. I had visited a few incubators but I had no idea of how to run one. Typically I used to spend practically all my time here because we all live on the campus. You know it's very common for some of us to come back to the departments after dinner and we'll work till about two to thirty three o'clock whatever. Go back to the go back home at that time. So we would get ample time to interact with these students and that was the time when I used to spend with these incubating companies. Couple of instances very interesting example. This was I think a Cushops company. So I hear at two o'clock when I am walking off some discussion going on in front of those faculty rooms there was a small discussion area which was commonly useful. And I went and I overheard some negotiations going on. So one fellow sitting with his back to me was saying but the other company is giving one percent. So I did not understand what it was and he says why should I take your half percent offer or something. And Cushop was there or his colleague was there saying no no but my half percent will be better than that fellow's one percent when you do the valuation. Then I went and found out that the fellow was sitting was the prospective gold medalist in the computer science department and both these startups were trying to hire him for summer and since they are no salary to pay they were offering him stock option. So he says half percent for one summer or one percent for one summer. This is the innovative ways in which you can get the early contributions from talented individuals if you have no money to share. I again reason I give this example is to stress that while money is important money is not necessarily the only thing. If you are innovative you can actually work out. After all the startup entirely is a dream. So anybody who starts up a dream is a dream merchant and if you can sell that dream merchant to me as an incubator runner or a dream to a venture capitalist he should surely be able to sell that dream to a startup to to to the prospective employees. Today in Bay Area if you join a startup you actually get salary plus you additionally get some stocks. So this is almost a common standard thing these days. One of the rules of thumb that I have understood from people is that originally when you set up a company you own 100 percent. Typically you should set aside 40 percent for venture capitalists 40 percent for yourself and 20 percent for the employees. That is considered a reasonably good thumb rule for wealth distribution. Of course there will be differences depending upon the valuation and how much money you need and whatever whatever. We figure this out and we try to tell the startup companies which increase from two to four to seven to ten later the mentoring that happened actually happened inadvertently in the sense that I myself did not know many of the tricks of the trade in the startup business myself. I was learning with them every time anybody from the Thai group or anybody from the Bay Area would come I would arrange a lecture. So I remember most of the people would have late night flights from here back to U.S. 12 o'clock, two o'clock some of you would be familiar and they would have day long appointments. I would invite them for an after dinner meeting and they would typically come here at 8.30, 9.30, spend about half an hour, one hour with the people with the incubated people and then go back and that turned out to be very useful because the youngsters what they are looking at is actually at role models they do not want sermons they want assistance, help and they want role models while interacting with me might have been useful to them it was not as exciting as listening to Dr. Swaars Patel or Jagdish or someone who actually has done this succeeded or even if he has failed he has succeeded again that kid. Plus the amount of insight these people brought to the table they were able to discuss netiquities of the individual projects depending upon the areas in which they work it was absolutely valuable input thankfully I was connected with the business and finance industry in the country because I do a lot of consulting with banks and other people I had a part in the network of people who then became part of the VC funding agencies in the country so therefore it was possible to relate to those people bring them here and so on sign does it now very very methodical when you set up an incubator you have to ensure that people from these two or three cadders namely successful entrepreneurs and VC funders somehow come to your place and interact with these individuals while actual VC funding is important but it's not as important as interaction with those who who do this VC fund because interaction with them tells the youngsters how they will be evaluated what is it that the VCs are looking for what is it that the successful entrepreneurs have done we did all that in the early days the TAI chapter in Mumbai helped us a lot TAI has now chapters in Mumbai in Bangalore in Delhi Delhi chapter is also doing quite well I have been talking to the TAI India people saying set up chapters in other places don't stick to metros and so on they said that they will try and set up a chapter in every city of the country where there is a minimal amount of industrialization so I do not know for example whether in Rajasthan and Tamil Nadu there are chapters like that but in the absence of TAI you may want to tag on to the local commerce and industry association you may want to tag on to the local successful entrepreneurs there would definitely be some in every city in every town although they remain aloof from the academic environment because they do their own business but if you are running an incubator you have to bring them on board as a matter of fact we have found that there is an additional advantage such people invariably start talking about the research programs start talking about the educational programs and they give valuable inputs so it works it works to be very useful either in the initial days we used to give them because it was a IT pilot incubator we used to give them some computers internet roughly about five lakhs rupees worth of equipment and infrastructure we would spend per company and then after one year we said you will have to start paying rental charges if you don't get out because there has to be someone I wanted someone to take charge of this and to formalize this process and I could not find someone till one day I got an application from a startup company two of whom whose proprietors were based in Pune they had listed one name professor Dr Rajan Lagu as the advisor technical advisor I didn't tell them I knew Lagu Rajan Lagu by the was IIT Bombay student we take one of my favorite students went to the industry did his PhD came back and taught for some time and had gone back and set up his own company in Singhal Prasim Pune so I just told them I want to meet your technical advisor please get him here he came next week he came it was then that the young students came to know that I already knew Lagu and so on because Lagu must have told them them so I asked him what has happened to his company he says no company is running fine sir my manager is running it but there is nothing exciting that is happening whereas what is being attempted by these kids is very exciting so I want to participate I want to advise so I said but you are in Pune these guys will be here he says no no I don't mind spending time in Mumbai what about your wife and kid daughter is growing wife works for an NGO absolutely no problem then I asked them why do you want to advise only one company would you mind advising everybody he did not understand it first I said I need an advisor I need a program director for the incubator so why don't you join in as an advisor and he says but I have interest in this company so I said will it come in your way of advising others he said of course not so I said if you are convinced I am convinced I am not worried about it you see I was talking to you about the motives and objectives the motives might not be understood and seen to be impartial by others but if you are convinced then you should not mind going ahead with that but the person was absolutely valued a person who has actually set up a company a person who's gone through the pens a person who understands technology to the best of anybody's ability phd in computer science in electrical engineering second he has the passion what better you ask such people you will not get by advertising in newspapers you have to keep your eyes and ears open and you will find them anywhere any time and if you are traveling by train and you find that person in a bogey in your compartment before that person gets out of the train that person should be employed by you you leave him somebody else will employ you this is the only way to get good people there's no other way the fortunate privilege i had was i had the freedom to do that because my director others agree there was some negotiations you know he says i can't come at a professor's salary how much do you need at least 50,000 rupees so i went to my deputy director deputy director figured out he says we'll appoint him as a professor of entrepreneurship a visiting professor for four days a week he will visit as a visiting professor teach the entrepreneurship course we'll pay him 25,000 rupees a month for one day a week when he consults with you you pay him 25,000 rupees a month for that simple problem solved why i tell you all this is that you how to figure out some innovative way not all good people will come free for you some will come free some will have a cost some will have a very large cost 50,000 rupees was more than my salary more than my director's salary we did not hesitate in agreeing to pay that because that person was worth more than that the contributions are of course extraordinary what you see as a successful incubator today in the form of side would not have happened if people like these were not available he spent religiously five days a week he mentored each and every team additionally he started converting ad hoc processes that i had set up into a formalized set of process again in iIT this is probably a style there are a few people like me who are usually chosen to create new initiatives because when you create new initiatives existing rules don't apply there are no defined processes and as a matter of fact you have to break some rules so people like me are called commandos typically send commandos to break and vanquish everything in the way but such people have to be followed by a team of legitimizers you know stabilizers so people like professor sarada professor amaranath they will follow up and they will make rules and they will make procedures so establishing law and order is the second act i am not suggesting that you break all the rules but i am also suggesting that do not set up only law and order you will need a combination of both some innovative disruption at the beginning and very carefully planned processes at the end and throughout the transition you will sometimes require this sometimes require this don't hesitate in using whatever is appropriate at that point in it pure play commando activity pure play baking of rules etc will only result in chaos you need system but a pure play system extremely well defined procedure will have a very well established and operationally running incubator without any success rate as you define same thing about quantity and quality you cannot convert one from the other same thing about breaking the rules and framing the rules one is not a substitute for other you require both our history has taught us a lot of these things mainly the freedom to act in the initial days and this freedom must be embodied in whatever structure you give to your incubator to your CEO and it must pass down equally well to everybody down the line I'll give a simple example now the school of IT has been merged back with the computer science department but in the school we followed this philosophy where everybody was able to take a decision if let's say something goes wrong somewhere and to fix it whether it is a electrical circuit or whatever whatever whatever requires an expenditure of 200 rupees not a large sum the project assistant in charge of that activity would first spend those 200 rupees by that thing fix it and then ask for reimbursement in a conventional department structure in my own department of computer science the concerned person will first prepare a draft saying please approve 200 rupees and the professor in charge of that lab is missing for 10 days nothing will happen for those 10 days this is how government departments are run this is how unfortunately some institutions are run never ever even permit such thought process to enter into any incubator that you run if you run your incubator like that I'm guaranteeing that it will fit it will not work if you are setting up an incubator advice all the people down the line that each one of them exists to serve the startup companies the startup companies don't exist to satisfy your rule book if a startup company has a problem if a telephone is not working a PC is not working network is down water is not there in the cooler electric supply is right whatever whatever whatever if that problem is not solved in 24 hours somebody must be fired and if somebody is not fired the CEO should fire himself or herself believe me this might appear harsh because it is not our normal way of life I am humbly suggesting that that should be our normal way of life for everything that we do but if we can't because of the because of the what should I say tradition of the so-called government department then you must set up different different traditions here and believe me the traditions that you once said they will continue today's sign is an established organization but even today if any startup in sign as the smallest of the problem there is a person who is responsible to solve that problem that kind of setup is what we learned as a very important lesson see we talk of infrastructure infrastructure computers or whatever other equipment that you have furniture telephone as I said it's a people's game and you want people to concentrate on building business building products you don't want them to concentrate on running after a fuse wire or whatever that is your job if the incubator can't do that then incubator is not useful this is the most important lesson we have learned this is not the only thing but it is an important thing all and above that is the notion of mentoring today we have a mentoring tunnel successful entrepreneurs from the Mumbai region and others they come and regularly mentor our startup in those days this would be done sort of informally yeah please I am Prasad from NITI speaking the mother organization and the incubator what kind of relationship is required to be what kind of this question I mean this question will be answered by sign I do understand but I definitely want to listen from you a bit of the relationship should be that of a complementary nature whatever be the structure the incubator must be able to operationally function completely independent of the mother organization if it can't it is not an incubator it is a department of the parent organization incubator requires a different mindset to run parent organization will have a different mindset because it is its purpose is different the objective here is different as you do as this question to professor Amarnath and others and also to the last time we have we have actually a board the board level thing is common so professor Mishra our director is on the board IIT Bombay owns the site the chairman of the board is Ashank Desai of course the director views are considered most important of course even important regular decisions in the sign are taken at least after informing him if not taking his permission but sign runs independent so that that is that is that is a definitely an important lesson that we learned from we also learned how to evaluate the proposers better in the early days we had no clue I would personally I would do some evaluation using my own colleagues opinions and those which would filter upward I will send them to my friends like Ashank Desai or Pravin Gandhi or Harish Mehta or somebody saying because it was an IT incubator we could get that valuation was a huge thing the first valuation that was done in the VC funding to be done for the first startup that is writeoff.com which is Kashyap Devra's company so Rakesh Mathur who was one of their mentors Nandan Nilekani and I where the three people committee deciding how to do the valuation and a newspaper reporter tagged it she was quite excited that something of this sort is happening here we had a meeting in Hotel Ambassador and they made a presentation and we looked at the possible things etc etc but we did not be covered too long and then Nandan and Rakesh looked at each other and Nandan looked at me and said what do you feel press party I said these guys should be helped they are doing well then Nandan asked Rakesh how much is how much do they require require about one crore rupees so then Nandan says all right I am not interested Rakesh why don't you fund Rakesh said all right so should we say we we put the value of the company at about five crores so why five crores because they require about a crore rupees and 20% of five crores is one crore and the matter ended there so the newspaper reporter was completely surprised she thought a lot of spreadsheets will be done and calculation done etc etc and she asked Nandan so when are you going to do the valuation Nandan said it just got completed and she then further asked this question so Nandan said look you must understand two things none of the three people sitting here are interested one bit in that company are making money out of that company we all want this to succeed because this is amongst the first ones secondly even if we had to do a very detailed valuation we are unlikely to have come up with much different figure than this this comes out of our gut fee we are talking to both the people who have experience and thirdly he says we don't have time to bicker they need money yesterday evening sometimes friends and I have participated subsequently in more detailed valuations you calculate a whole lot of ratios this you know doing a valuation of a company when the company is already in business is much easier you can actually verify the projections and so on angel funding how do you do valuation okay it's still a mystery to me but you still have to figure out how you do that what Professor Lagu's maximum contribution was in coming up with this model of discharging our share so suppose we have 3% share or 6% share some N% share in a company he said holding it perpetually which was my original idea is not useful because the VCs would be very uncomfortable if you don't dilute your share you suddenly become a very important stakeholder so he suggested that we discharge one third on the first round of funding so like they got 1 crore for 20% suppose I am holding 3% in them today I will say that okay you buy 20% of his you buy 1% of my share also and pay me cash when you get second round of funding whatever is the valuation in the second round we will discharge another one third of our share and one third we will hold optionally for a billion dollar IPO in case that fellow does a billion dollar IPO even 1% could be good enough Nandan endorse this Kamal endorse this everybody endorse this saying that it's a good idea because this permits a cash flow to the incubator as every round of funding happens and it also holds you some share for a prospective non-linear increase in wealth in case the company does well I am very proud to tell you that later when department of science and technology wanted IITs to start such incubators they invited proposals our proposal was made by Professor Lagu and when it was sent the DST committee called all IITs and said we like your initiatives but the way the proposal has been made by IIT Bombay appears to be most realistic and well done please rewrite your proposals on those lines we will approve all of them so IIT Bombay's proposal was accepted as a sort of benchmark the sign today has all the procedures on the website and do ask pointy if you have any additional questions but please do use those as modest not necessarily because they will fit your thing they may not you may have to modify them but that is because they have come out of a lot of experience and maramari and corrections and whatever whatever whatever as I said without people such as Professor Lagu or Irwin Patel or of course the great supporters like Kamal Rehki and Nandan and without the enthusiastic participation of the startup community don't forget that if I found this funny negotiations going on at 2 o'clock at 2 o'clock those people were actually awake and conducting these negotiations and working as a matter of fact I remember this happened with my Zeus fellow every time I go out twice or thrice a week I'll just pass by that and I'll find a fellow sleeping in a sleeping bag two people actually and I'll find the same people sleeping there so one day during the daytime I confronted them I said you should have you have a lot of sleeping partners every time I see I see that fellow sleeping only he said sir we take turns in sleeping we have four hour sleeping shifts because there's there's a limited 10 by 10 room we have more people so people will sleep for four hours they will work then again they will and he says unfortunately every time you walk back home in the night that is the time when these people have sleeping term so you see the same people sleeping but believe me they are awake most of the time when they are working the incubators work 24 hours lights never went off so even today for example in the incubator companies that we have mostly in sign if you go to sign Saturday Sunday whatever day night not everybody but some place you'll find some joker working that must be the ethos if you have startup companies in your incubator which lock their offices by five o'clock in the evening as your institutions do then there is something drastically wrong with that and this ethos will not come automatically in the initial days this ethos will come by the participating faculty members actually spending time you don't have to do anything worthwhile I never did anything worthwhile as far as their technology development was concerned but just walk in after dinner say hello how are you kya ho raha hai, khane ko thik hai, paani ko paani miltai hai, bhijli hai, what are your problems when are you getting married just talk shop develop context they all that they want is a human being to listen to them as a human being that's all it solves half the problems the remaining half they are capable of solving if they were not they would not be doing what they are doing any but this is very very important they should perceive that there is some elder in the family who is there to look after them in case they are in a problem and of course occasionally they will come up with real problems some of which you can't solve you have to tell them the other thing that I learned is that in the early days this is important that I should convey to you immediately after the first round of funding at least one of the startups I explicitly saw that and it happened with actually two startups suddenly the students were moving in a car they were moving with expensive mobile phones and I felt something was amiss and nothing wrong in moving in expensive cars I like to move in expensive cars but I have worked for 35 years to earn that kind of money to move in expensive cars and that money was not earned by them from their customers that money was earned not earned really given as a loan by a venture capitalist funder and I inquired they said no no no we have to meet you know prospective customers etc I was not fooled by that because the prospective customers do not come to see what car you are traveling you could very well go in a local train and and still meet one of the two companies exited just about okay but collapsed later on the other company actually broke up while getting incubated there could be many other reasons but I do attribute that reason to the propensity of the individual to get enamored by the lot of money that you receive and instead of using that money every price of it in appointing new people or buying something that is required or marketing or whatever spending it on yourself when you mentor your startups keep a small eye on such things keep a small eye on how the young people young people are likely to be tempted more to do this kind of thing than slightly older people and younger world this is not good and this has to be told in no uncertain terms in short you have to behave with the startup companies exactly like a father would behave with children extremely concerned in the heart willing to solve any problem of theirs looking after them making your presence felt but being stern and required inculcating discipline when it is essential and the last lesson I learned from Kamal is do not overdo the act of supporting them example that he gave was a famous if you have seen the young birds when they start growing old the mother actually pushes them from the culvert the child bird is terribly worried you know it will die but the mother knows that unless pushed on the brink the child will not fly you have to take that attitude so he says don't what was the term that he used you know basically saying don't fondle them too much let them face the reality of the life let them face the music of the life be behind them but don't try to shield them from the real they have to face the real world that is only when they will and some will fail that's okay so this is how today we have this sign the transition from this great startup experiment to the ultimate structured society that you see today you shall go through it tomorrow as I said Professor Sarda and Professor Lagu in absentia I will be talking to you and three of the startup companies two at the beginning these two people as I said the pilot and then Girish will be talking to you tomorrow evening day after tomorrow the entire day will be spent on defining and describing the formal structures that we have arrived at I would like you to form an independent opinion after going through this sort of growth or the transition not all of you would necessarily have to go through the same problems that we have faced today the situation is much different department of science and technology and other agencies are willing to give you some funding is a better understanding you can start off at a different level already but there are also some shortcomings of starting off with a formal process namely you will do very well in defining quantitative measures in terms but you may miss out on the qualitative things one of the reasons I wanted to share with you the stories is to tell you that there are very very interesting and fascinating qualitative aspects of life when you try to set up and run an incubator and I think if you inculcate some of those and pass on the message to others perhaps that will make life if nothing else more interesting and probably more useful I will now request as I told you my friend Dr. Sridhar Shukla is here I would he is not his company is not one which has been incubated in IIT but he is one of the greatest supporters of IIT in many of its activities I will request him to spare some 10 minutes of his time to share with you how he sorted out problems when he was leading a startup and incubating without an incubator perhaps that would also be useful perhaps Dr. Shukla you may want to share with them what problems you faced and how an incubator could have possibly help you solve those problems because then they can take that down as an agenda item for them Dr. Sridhar Shukla for you Thank you very much Dr. Phatak it is always fun to be here he is the one who taught me the first programming course in 1981 time back and we keep coming here to get motivated by him and the whole environment here so you asked me to speak for 10 minutes I just walked in I don't know what has been discussed before but the topic is about incubation so as he introduced I have no real qualification because no company I have worked with has been incubated out of an incubator but I would say this is the second company that I have experienced with to tell you my background very quickly so that you get a perspective on my color electrical engineer 83 from here master's PhD somewhere in the US six years doing that then six years of being a prof at a university back in 95 with persistent for eight years as it grew from say 25 to 500 and then five almost five years back started one more one company with a high school classmate to create some products so with this experience for on the topic of incubation I would like to say only a couple of things I will of course elaborate on them I understand the audience is interested in setting up incubators at their particular organizations and then what kind of support you should give to people at your who want to create startups and fly out so the first item is provide adult supervision and that means a few things when somebody young and enthusiastic with some fantastic goals and the energy to take them to conclusion start off someone has to be there to keep giving them the so the first dose would be teach them to survive I mean that's what mothers or you know parents of young ones in any aspect of animal life to do they teach their young ones to survive so in this area of technology or creating a startup survival would mean solve a problem that some all the time so solving a problem is basic because then that's where you bring your skill in and if somebody is willing to pay for you actually get revenue it may not lead to an out checking product right away but it's definitely something that gets you started and lets you survive we have found a number of people including ourselves going there out of I want to create thing that's going to create a revolution but you know many a successful company just start by surviving second item I have is at no point should the incubator organization let the startup forget that they must have a long-term view because if they are going to get acquired in x number of quarters for why million dollar value valuation then I think people are chasing fantasy it may never get fulfilled and you it just does not bring out the true commitment so it has to be I have a long I want to create something of value in this area continue doing this when that they will get that these guys to support me and won't make merry after they get acquired that's 10 all the time long term the third point I have is once again very important that almost well no matter how season need is to keep a focus on a satisfied profitable and growing customer base if there is no customer you are in no business it has to be a satisfied customer because he is going to help you grow and the guys need to have the ability to satisfy them which is many times not there the customer base has to be growing otherwise you really don't have a market and thirdly it has to be profitable otherwise you're all doing this for no reason so these three qualities of what customer community people talk to have to be identified by the incubator companies all the time and at any cost headstrong behavior from entrepreneurs has to be prevented because if they have an idea I mean headstrongness is certainly good but you can't have a bloody head while doing it you can't go under so I have created something and I know if it's of value but a few few people don't buy it one there's no point in sticking to it so I would qualitative aspects of providing adult supervision which are a must and which are required frequently the classic example I like to give is we all get taught as children that you must eat right and exercise I don't know how many actually managed to do that it's a lifelong struggle for most of us so that way you need a reminder for the basics all the time and the incubator should do that so that's really the longer item the second aspect for which I think I heard professor Fartek referred to quickly is make your startups very efficient a lot of valuable time is lost in doing things like sending offers reaching out doing screening when you get a new customer how to quickly qualify you know writing a contract with them creating basic collateral creating a website all of these things should happen snap of a finger because they are in an incubator should be common system administration services when all of these are given and you take a walk around the place asking them what how well they are doing I think that would be a great so I don't have much more to say