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News Updates - 14 May
2001 25 rising global stars - Fortune magazine 25 most influential people in eBiz - Business Week Jumpin' Juniper - Business 2.0 Indra Nooyi is Pepsi President - Financial Express What CEOs want you to know - Fortune magazine Management principles by Ram Charan... - eCompany Providing a capital connection - Washington Post NEXT-GENERATION GLOBAL LEADERS - 25 Rising Stars What will the world look like a decade or two from now? Who knows? But these young business leaders surely will have helped shape it. Navin Chaddha, doesn't build brands, not even his own. But he does build companies - lots of them. And if his name isn't exactly familiar outside Silicon Valley, his technologies certainly are. Anyone who's used Windows Media has encountered his first startup, VXtreme, which he sold to Microsoft in 1997. Fans who caught March Madness on CBS's Website had their streaming courtesy of his second creation, iBeam. And folks who use any of the small-business software offered at BellSouth's or Bank of America's sites have benefited from his latest, Rivio. "My core strength is being a technologist," says Chaddha. "Why spend hundreds of millions building a brand?" Chaddha, 30, might sound like an all-I-need-is-my-code geek, but he's a natural businessman - albeit one who stumbled into the business world. Growing up in Delhi, India, Chaddha was a dedicated academic, winning a fellowship to Stanford in 1992 to study electrical engineering. In three years there he earned a master's and had nearly finished a Ph.D. when the Internet revolution came along. Suddenly his expertise - moving video over networks--appeared destined for more than just academic journals. In 1995 he started VXtreme with a professor and some classmates, created a host of streaming technologies, and 19 months later sold the firm for $75 million. "I realized there was this hidden entrepreneur in me," he says. Chaddha quickly let it out in the open. He worked at Microsoft during the week but reserved his nights and weekends for building two new companies. Streaming-media firm iBeam went public in 2000. But it's Rivio that has the most promise. Rivio crafts Web-based payroll, accounting, HR, and other software for small businesses. It's a huge market, but a fractured one that the big software makers find hard to tap. Which is where Chaddha's business strategy comes in. As CEO, he's teamed with the companies that have the most contact with small businesses--banks, phone companies, and ISPs - to offer Rivio under their brands. How will they get subscribers? That's their problem. Chaddha is content to work in the background. The
25 Most Influential People in Electronic Business (e.biz)
What's a tech exec to do in the midst of what experts say could be the biggest slowdown in 15 years? These 25 heavy hitters offer bold advice: Don't just hunker down and wait it out. Now's the time to take aggressive steps - to invest, build, develop new products, and prepare for the upswing.
When Pradeep Sindhu founded Juniper Networks Inc. in 1996, industry pundits thought he was crazy to take aim at networking powerhouse Cisco Systems Inc. Five years later, Juniper has grabbed 30% of the high-end router market. "What's our secret? Focus and executing relentlessly," says Sindhu, 47. It doesn't hurt to have an extra ace up your sleeve. For Juniper, that's the Net. The company has built its operations from the ground up to take advantage of the Internet. That enables Sindhu and his colleagues to focus on developing Cisco-killer products - and not get bogged down with the manufacturing, inventory, and other distractions of most metal-bending shops. The financial payoff has been handsome. Juniper last year enjoyed an eye-popping $1.02 million in revenue per employee, vs. $703,529 for Cisco and about $400,000 on average for the communications equipment industry. "The Internet is a weapon that cannot be beaten," says Sindhu. This little David has turned into a Goliath in its own right.
How
Juniper Did It? Listened to customers: The company often let its customers sample its products before they were released, getting valuable feedback and boosting customer confidence. Good timing: When one company dominates a market (as Cisco continues to do, but to a lesser extent), some customers get edgy and start looking for alternative suppliers. Juniper was there with a sympathetic ear and a quality product. Great talent: Building a core router is extremely difficult. Juniper made a point of hiring engineers with proven records. Clients follow these engineers "as if they were rock stars," says one Juniper customer. Pradeep Sindhu looked at "core routers" five years ago and was unimpressed. Leading vendors such as Cisco Systems were using technology that was "three or four generations behind state-of-the-art," he says. Sensing an opportunity, he left the computer science lab at Xerox Palo Alto Research Center and launched Juniper Networks. Since then, Juniper has steadily eroded market share from Cisco. In 1998, Cisco had more than 90 percent market share in the rapidly growing, highly profitable, multibillion-dollar core router market. Consequently, Juniper has stolen the networking industry's "hottest company" title from Cisco. The unseating comes at an inopportune time for the networking Godzilla. After besting Wall Street projections for 14 consecutive quarters, Cisco fell short as the year began, prompting CEO John Chambers to talk about the nation's economic slowdown and admit to not reacting quickly enough to Juniper's challenge. "We were slow in reacting to [core] router networking requirements," said Chambers in an analyst call in March. No such chatter has come from Juniper, where revenue grew more than 600 percent from $103 million in fiscal 1999 to $674 million in 2000 and income from a $9 million loss to $148 million profit. "Usually, a startup company will have a misstep or two as it executes its business plan, but Juniper has done everything right since inception-that's truly amazing," says Greg Geiling, a communications equipment analyst for J.P. Morgan Chase. Lucrative
choice Cisco "announced" similar capabilities at the end of 1999, promised delivery in the summer of 2000, reannounced the product in January 2001, and finally shipped them this spring. "Cisco encountered the problems that come from operating a multibillion-dollar business: Corporate bureaucracy slowed down delivery of new technology," says Rick Malone, a principal at Vertical Systems Group, a Dedham, Mass.-based market research firm. Juniper also benefited by working closely with large carriers to understand their requirements. "We had Juniper's routers in our laboratories a year before the company announced them," says Stephen Stuart, vice president of research and advanced development for Metromedia Fiber Network, a carrier that selected Juniper for a backbone network connecting 67 cities worldwide. Juniper was not the only startup trying to become that alternative supplier. Venture capitalists poured hundreds of millions of dollars into high-profile startups, but reaped little from their investments. But while other startups failed to pass the product reliability test, Juniper succeeded because it attracted a strong engineering team. "There are only a handful of engineers who have been able to build core routers," says Metromedia Fiber's Stuart. "We follow them as if they are rock stars. When I saw that Juniper had hired [top engineering talent] we became interested in what the company was doing." David
versus Goliath "The way that Juniper has executed its business plan is similar to what Cisco has done historically: There haven't been many mistakes," Wilson says. "It should be fun watching these two companies compete in the next few years." India-born
Indra Nooyi is Pepsico president New York: PEPSICO Inc named Steven S Reinemund chairman and chief executive to succeed Roger A Enrico, according to a company statement on Thursday. The United States’ second-biggest soft drink maker also named Indra K Nooyi, currently the company’s chief financial officer, to the position of president. Ms Nooyi, 45, has been senior vice-president and chief financial officer since February 2000. CEO
Mind Reading - What the CEO wants you to know Once in a great while, a business book comes along whose startling usefulness springs from its simplicity--not, please, to be confused with simple-mindedness. In What the CEO Wants You to Know: How Your Company Really Works (Crown Business, $17.95), consultant Ram Charan contends that all businesses, from a street vendor's stand to General Electric, operate on the same principles; that anyone can understand these principles without a high-priced business degree; and that your boss really, really wishes you would act as if these principles mattered, because they do. Think you've already got a pretty good grip on what's going on at your shop? Great! Answer these questions: (1) What are your company's sales? (2) Is the company growing, or is growth flat or declining? (3) What is your company's profit margin? Is it growing, flat, or declining? (4) How does your margin compare with those of your competitors? With other industries? (5) What is your inventory velocity? Your asset velocity? (6) What is your return on assets? (7) Is your cash generation increasing or decreasing? (8) Taking all of the foregoing into account, is your company gaining or losing against the competition? Had a little trouble there, did you? Not to worry. In public companies, you can get the lowdown fairly easily. And in private ones, Charan notes, "management is often willing to share the information but believes people...are not interested." Here's a chance to prove them wrong. Barely
Managing Three Career Junctions Where Managers Need Help In rummaging through the heaps of paper in my office, I came upon a terrific new book, The Leadership Pipeline: How to Build the Leadership-Powered Company, by Ram Charan, Steve Drotter, and Jim Noel. Ram Charan is a high-powered "leadership coach" whose clients include no less than General Electric's Jack Welch, and who used to be on the B-school faculties of both Harvard and Northwestern. All three once worked at GE's Crotonville, the best leadership development institute on any inhabited planet. They have tweaked GE's Walt Mahler's model a tad (who had a key role in the succession-planning process at GE) to make it apply to smaller businesses with flatter hierarchies. In chronological order, the crucial passages are: The transition from managing yourself to managing others. More important (and more difficult for managerial novices, say Charan et al.) is a values change: "They need to learn to value managerial work rather than just tolerate it." Yes, they have to join the dark side and become one of Them. The transition from managing others to being a functional manager. The transition from managing a function to managing a business is a big one, Charan and his co-authors say, and it requires a "major shift in skills, time applications, and values." Above all, it means that "people skills" become exponentially more important than "hard skills." Providing a Capital Connection 3 May 2001, Washington Post, By Kenneth Bredemeier Sudhakar Shenoy, now 54, remembers what it was like to be new to the world of business and struggling. It was 20 years ago, and he'd started his software firm on $2,000, but he needed more cash to jump-start his venture. "I went to six or seven banks looking for $10,000," the Indian immigrant recalled the other day. "They all turned me down. But was it because I was a minority or because they didn't think I had a good business plan?" He still doesn't know the answer to that question but eventually found a bank, the now-defunct First & Merchants, that liked his idea and loaned him $50,000. The experience made Shenoy keenly aware of the difficulties minority entrepreneurs face in securing capital to start a business. Now, he and others throughout Virginia, Maryland and the District are trying to connect minority business people with the banks and venture capitalists they need to know. They're staging an Emerging Business Forum July 11 to 13 at the Westfields Marriott Conference Center in Chantilly with the goal of attracting 300 or more minority business people who need start-up money or even second-round financing to keep their operations going. Shenoy, by any measure, has succeeded. He is chairman of Information Management Consultants Inc., a private McLean firm with about 300 employees here and another three dozen in India and annual revenue approaching $50 million. Shenoy added, "I've seen a lot of diverse entrepreneurs come in and succeed, and there's a potential for a lot more." |
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