Iconic Indian-American entrepreneur Kanwal Rekhi is on a whistle-stop tour of India to talk to entrepreneurs, as well as promote his book, The Ground Breaker, published by Harper Business, which details his life story. From moving as refugees from Rawalpindi in Pakistan to an early life in a lower middle-class, cramped household in Kanpur, Rekhi’s break came when he cracked the IIT entrance exam and joined IIT-Bombay. Later, moving to the US for his postgraduate degree in 1967, when that country opened up for immigration, Rekhi lived the American dream —warts and all — getting laid off, founding successful companies and becoming rich. The first Indian-American CEO to take a company public (Excelan) on the Nasdaq, Rekhi later founded and built The IndUS Entrepreneurs (TiE) into a large global network. In Hyderabad and later in Chennai, at the Madras Management Association, Rekhi met with businessline for a conversation on his life and entrepreneurship.
Can you list a few remarkable experiences or inflection points in this long journey of yours?
Getting into IIT-Bombay was a life-changing moment, and the US opening up to engineers was one too. My first three jobs, they didn’t last very long as I was laid off. I had a job offer with IBM that I foolishly didn’t accept. And IBM, which was 80 per cent of the computer industry at the time, blacklisted me for life. It looked pretty awful at the time but, looking back, that was a good thing because now 80 per cent of the industry didn’t have a job for me and I had to fend for myself, try harder. When I got back to California after my third layoff, I was very focused on stability. I worked for a defence contractor that was doing flight simulators for the Air Force and Navy. I did so well that one of the generals told me that I had become a national asset. So, when I decided to leave that company to go do my own, he was very unhappy. That was a turning point. Marrying my wife, Anne, was also a life-changing event because she was an American, and she accepted me as a partner. Inter-racial marriages were not very common those days.
How did you go on to start TiE, and has it fulfilled its agenda?
I am a tough businessperson, very focused on profits and efficiency. But I realised we had to become messengers, role models, mentors for younger people when India began liberalising in 1991. The idea was to encourage our people to become entrepreneurs. When we reflected on our own lives, we realised that we had a very lonely journey, no believers in us, no mentors. Like any organisation, it has had ups and downs. It is right now on the up; we have close to 70 chapters globally. In India it’s in around 23 cities. TiE has done much better than we expected.
Since you were in Hyderabad for the inauguration of KREST (Kanwal Rekhi Rural Entrepreneurship and Startup Centre) in Nizamabad, Telangana, please explain its scope and the opportunities you see there.
We have long had this divide between ‘India’ and ‘Bharat’. India is modern, on the move, educated, and scientific; Bharat is stuck in the mud. This divide cannot, and must not last. We need to bootstrap Bharat out of that. My thought is that India is finally on the right track regarding entrepreneurship. We are putting faith in people, their enterprise, and their energy. India is becoming a modern, scientific, entrepreneurial nation — that is our brand worldwide now.
How do we apply that to the ‘Bharat’ side? How do we help them bootstrap quickly? KREST is our attempt to bring technology and new ways of doing things to tier-3 cities and villages. We want to empower village entrepreneurs through drip irrigation, solar power, and soil testing. If ten million Indians become entrepreneurs over the next 20 years, almost all our economic and employment problems will be solved.
What will KREST do on the ground?
The model is based on what (Gururaj) Desh Deshpande has been doing in Hubballi for 20 years. We bring in young kids, equip them with skills to make them employable, and teach them technologies that can be deployed immediately in villages.
For example, you can electrify a village quickly with solar cells, batteries, and LED lights, which are now very cheap. We can use technology to improve water wells and conduct soil testing to determine the best crops. KREST focuses on creating small-scale entrepreneurs, who take these solutions back to their villages. It’s an experiment; we’ll learn and scale up as we go. We aren’t claiming any proprietary value — we want to open it up for others to replicate.
What are your views on AI? Do you think it’s mostly hype, or a transformative tool?
I’ve never been into the hype. I see AI no differently than the steam engine, electricity, the telephone, or the internet. It is a productivity-enhancing tool. Every such tool eventually creates more jobs and wealth, because you can do more with the same resources.
In the short term, there is an adaptation cycle in which it may replace some roles but, overall, it’s a boon. Look at what happened with computers in India in the ’70s — people protested, fearing job losses. Instead, software became India’s saviour. AI will do the same. It will also be a great equaliser for rural areas, by making people with fewer formal skills more productive.
You’ve famously said that “any fool can burn money” (referring to start-ups splurging money raised from investors). Do you see more sense prevailing in the start-up ecosystem now?
Every business eventually has to produce more than it consumes. You cannot have a business that is always burning cash. We’ve seen some start-ups struggle with this. When I started Excelan, I was profitable at $10 million in revenue. Profitability isn’t just a romantic notion, it’s a declaration of independence. Once you are profitable, you don’t depend on market forces or external capital to survive. Profitability is also a measure of efficiency — does your business have the right to survive?
You’ve watched the Indian talent landscape for decades. What is your message to Indian students today, especially those looking toward the US?
When I finished at IIT in 1967, there were no jobs in India. You either joined an MNC as a trainee or you left. Today, India is different. There are huge opportunities here, and venture capital is available. You don’t have to go to America to prove yourself any more.
Furthermore, the era when America welcomed us with open arms, because it was falling behind in engineering, is ending. That was an abnormal 60-year cycle. America doesn’t need us as much now, and it is facing its own internal challenges. All the smart people staying back in India are ultimately good for India.
You often say that entrepreneurship and democracy go hand-in-hand. Could you elaborate why?
We are much better off than we were. Democracy and free markets are a matched pair — both are about choice. You choose your candidate; you choose your product. When we matched democracy with socialism, we limited those choices. We’ve come a long way since the days of “licence raj” and quotas. Entrepreneurship spreads wealth and empowers people to assert their rights. It’s a self-reinforcing cycle.
