Vinod Dham on Innovation: Invest in universities and free up businesses

The Snapdeal team had the pleasure of interacting with Vinod Dham, widely regarded as the Father of the Pentium Chip, at our Gurgaon Campus recently. Below are the highlights
of a fireside chat between Vinod and Anand Chandrasekaran, Snapdeal’s Chief Product Officer. In an extremely engaging session, Vinod shared his thoughts on fostering innovation in India, why Snapdeal is like Intel, and why he thinks millennials are the luckiest and smartest generation of independent India.

Anand: Vinod, welcome to Snapdeal. It is a pleasure to have you with us. Our teams are excited to learn about your journey as an inventor, entrepreneur and as a venture capitalist. We know you are originally from Delhi, went to Delhi College of Engineering. It would be great to hear from you about your early days here. Vinod: Thanks, Anand. I am glad and immensely proud to be at Snapdeal today, and I will come to why in a minute. But let me begin by telling your team that they are the most fortunate generation of independent India. They have all the choices, be it in terms of what to study, where to study and what jobs to take. And they are visionaries, many of them. I see start-ups today, that want to go global from day one. Even a decade ago, no one would have thought this as possible.

Fireside Chat with Vinod Dham at Snapdeal Gurgaon

Fireside Chat with Vinod Dham at Snapdeal Gurgaon

In fact, I think Snapdeal is a great example. I am sure neither Rohit and Kunal would have imagined how fast and how big they will grow. As one of the earliest investors in Snapdeal, I am really impressed by everything this team has achieved.

Growing up, I remember being intrigued by the moon landing, and pouring over literature on rocket sciences at the Galgotias book shop in Connaught Place. Even though I never wanted to be an engineer, I ended up pursuing an engineering degree. This was in the 60s, we had limited options and even fewer jobs.

After engineering, I pursued my love for physics at a small semi-conductor firm in Faridabad. From there, I went to the US to for a degree in solid state electronics. I was working in non-volatile memories for my first US employer, when Intel executives saw me present my work at an industry event and invited to join Intel. That was the turning point in my career.

Anand: How big was Intel when you joined? You worked very closely with Gordon Moore, how was that experience?
When I joined Intel, it was worth half a billion dollars, today it is valued at 60 billion. What I find interesting is that at that time, Intel used to operate a lot like Snapdeal does today. Corporate hierarchies existed, but only on paper. You were encouraged to cut through the layers, and directly go to the person who could solve your problem. I remember this one incident where Bob Noyce had gone to Kokomo, Indiana to sell my chip to an automotive company. He had a question, and he directly called me, then just a lowly engineer! Gordon is among one of the most modest and frugal people I know. I remember years ago, at a point when he was already a billionaire; his wife gifted him a Mercedes on his birthday. But he refused to drive it, because he felt that it didn’t represent him, that it too over-the-top.

Anand: One of the toughest periods that you went through at Intel was in the 1980s when your memories business was getting killed by the Japanese. At that point Intel took a decision which changed the course of the company. I guess that resonates with us at Snapdeal, because often times there are periods where you don’t know what the right thing to do is. Wondering if you could take us back to that time?
Vinod: The Japanese took the chips we were making and made them far more controlled, which increased their yield exponentially. There was no way we could have competed with the quality levels that were attributed to the Japanese memories. Over the next decade, the Japanese would go on to double their share of the memory market. The only two choices in front of Intel were to continue in memories and commit business harakiri, or set shop elsewhere, which happened to be the as yet nascent business of microprocessors. Grove and Moore chose the latter, and the rest of course is history.

Anand: In retrospect of course Intel took the right decision, but Intel agonized over this decision for a long time. We have seen this at other companies too, why do you think such decisions are so hard to make for CEOs?
Vinod: I think because under all the data, analytics and objectivity, we are human and emotional. Often, we get attached to ideas and ideals, whose time has passed.

Anand: What other sectors besides e-commerce in India, so you feel, are ripe for innovation and will see more investments?
One is definitely data science, the whole area of Data Analytics and Business Intelligence. There is a lot of good work going on there. The second one is Health Sciences, which of course requires a lot of capital, but new technologies are truly transforming health care as we know it. A lot of creative ideas are beginning to be seeded right here. Data Science, Cloud Computing, Cyber Security, Health Sciences will see more funding this year.

Anand: Indeed, we at Snapdeal are data sciences in a big way, to deeply understand consumer behavior because we feel that the future drivers of e-commerce success won’t be companies with the highest number of customers, but highest number of return customers.
Vinod: Indeed, I think this is a good year to consolidate, sit back, and review future strategy around sustainable growth. People talk about a bubble, I don’t think that there is one. Neither in India nor the US, what is happening is that the start-up ecosystem is following the natural course of evolution.

Anand: What is your take on fostering an atmosphere that enables innovation in India?
Vinod: India has just begun to scratch the surface. As much as I have studied it, America is the greatest nation in the world. You can’t fight them on their money, their prosperity, their military prowess. Why can’t any other country replicate their success? Their biggest secret is innovation, and governments that have always prioritized innovation.

The IBM exists because of the US government. Way back in the day, big, expensive machines were needed to tabulate census results, which no one else but the government could fund. Likewise, the internet as we know it would not have existed were it not for the vital role that the Defence Advance Research Project Agency played in the creation of the ARPANet.

Very early, US figured out probably the most cost effective way of fostering innovation. The cheapest labor in the United States is PHD students. These are smartest people from around the world, who bring their cutting edge ideas to fruition in the US. Iran is among the biggest enemies of Unites States, and yet the Stanford University’s mixed technology research teams are full of Iranian PHD scholars, My own research, back in the day, was funded by NASA. In fact, 80% of all PHD scholars in the US are foreigners.

In India, we followed a public sector heavy model. So instead of funding universities, we funded bureaucratic organizations like the Council of Scientific and Industrial Research that haven’t been able to deliver on their promise. Whenever I meet Prime Minister Modi, I tell him to fund the IITs instead. Even if 1 out of 10,000 students discover something big, that is money well spent. And second, get out of the way of youth; it is time to go from License Raj to De-License Raj.

Anand: I wanted to share an interesting observation in an article I read about you, that while you helped build Intel and the Pentium chip, you were also the only one, who through your work with companies like NextGen and AMD, ever gave Intel any real competition. Then you moved on to create another path-breaking enterprise in Silicon Spice. So as my final question, it would be great to hear how and when did the entrepreneur bug bit you?
Vinod: I am a very weird person and somewhat insecure. Firstly, I had really begun to doubt whether it was me or was it Intel that made the Pentium. Secondly, if you are in Silicon Valley and you have never started a company, there is something extremely wrong with you.

So I wanted to start something of my own, I wanted to find out whether I could design something better than the Pentium. I have to say that I loved the experience of building a start-up, which I feel will resonate with most of you here. The fact that every day you are fighting a new fire, everyday a fresh roller coaster ride awaits you and sometimes you wake up in the middle of night soaked in sweat; I loved every moment of it.

While I can’t take complete credit for thriving start-up scene in India today, I do take credit for having the vision to bring this culture to India, back in 2005-06. I would say the last 10 years were phase 1.0, of venture capital. When start-ups presented to us back then, they would say if you invest in us, we will pay you back in interest. The concept that somebody will take a part of your company in return for their investment didn’t exist. Now, the venture capital eco-system is in phase 2.0, and everybody is moving up the chain.

In the coming years, I see amazing software products coming from India, in cloud computing, data analytics, artificial intelligence. The game, I feel, has only just begun.

One final thing I would like to tell your team is that I have worked with engineers from all over the world, but the best minds come from here. So no matter what your role at Snapdeal, try to be a Change Agent. Ask yourself if there is a smarter, more efficient way of doing your work? Innovation and impact begin from wherever you are.


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