What does it take to thrive in California, the epicentre of America’s ICT economy? Brad Howarth recently travelled to San Francisco in search of answers from heavy-hitting Indian émigré, Vivek Ranadive.
Vivek Ranadive was just 16 when he immigrated to America from his home in India. Today he is the chairman and chief executive of TIBCO Software, one of America’s fastest-rising enterprise software companies. That company is on its way to reporting US$1 billion in revenue and is tipped as an acquisition target for the likes of IBM or Hewlett-Packard.
In April I travelled to San Francisco as a guest of TIBCO and had a good chance to talk with Ranadive about the factors that have led to his success. If there’s a secret behind it, it’s bound up in being totally focused on his objective, and the realisation that he could never reach that objective on his own.
Ranadive studied at MIT and Harvard Business School. His break in business came in the mid-1980s when he convinced the head of the global investment bank Goldman Sachs, Bob Rubin, to let him try out some ideas for automating the information flow of various Wall Street trading and information systems.
His idea was to build a software system that would allow different software applications to converse easily – a bit like plugging different appliance into a powerboard and allowing them all to share the same electricity.
That business, Teknekron Software Systems, was subsequently sold to Reuters in 1994. In 1997, Ranadive established a new company, TIBCO Software, to essentially take the same idea of lightning-fast information distribution and sell it to the wider corporate world.
“The training I got as a 25 year old on the [stock exchange] trading floor turned out to be the best training for everywhere else, because their needs are ‘more’ on every dimension,” says Ranadive.
Ranadive has shown remarkable proficiency as an entrepreneur by taking that one basic idea and improving it and reinventing it over a 25-year period. The company has succeeded in taking his ideas and extending their application across different industries, or added new functionality that makes life better for its customers. In this way, TIBCO has been able to remain focused on a central idea but has continued to grow its revenue.
By his early 30s Ranadive was financially secure, but, like many entrepreneurs, he was eager to continually test his vision of how things should be done in the market.
“I look at things and I see opportunities to improve them,” says Ranadive. “I see the world as a wonderful place full of opportunities and challenges.
“The mindset is that we need to have many shots on goal. The old kind of mindset is one where you plan, you line it all out, and three years later you get one shot at goal – but the goal has moved.”
When it comes to starting a business, Ranadive says it pays to choose your customers wisely. He was quick to sign blue chip customers such as Goldman Sachs and Fidelity, enhancing his reputation within his target market.
He also counts among his friends some of the most powerful figures in Silicon Valley, including Cisco chief executive John Chambers. He created his original trading floor technology on a high-performance computer borrowed from Sun Microsystems founder Scott McNealy.
He is similarly picky when it comes to employing people.
“It all comes down to attracting the right kinds of people,” says Ranadive. “Number one is you just surround yourself with people that are smarter than you. As long as you do that you will always be challenged.”
As TIBCO grows, Ranadive is adamant that there is no extra breathing space for him or his staff.
“One of the things that big companies try to do as they grow is make it easier on people,” says Ranadive. “When they do that, they basically kill people’s incentive to innovate and work hard. Good people like to be challenged and they like big challenges.
“I say: ‘Hey, you guys are smarter than me, so it should be harder on you than it was on me. I am like an idiot, but you guys are smart so you can take on big challenges.’
“That should be the mind set.”
Brad Howarth is a journalist and author of ‘Innovation and the Emerging Markets: Where the Next Bulls Will Run’, a study on the challenges facing small Australian technology companies. You can read his blog at lagrangepoint.typepad.com