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Chairman of Sycamore Networks Visits HBS

The Globalization Club at Harvard Business School hosted Desh Deshpande, chairman of Sycamore Networks, on Tuesday, February 21. Desh informally addressed the crowd, and his remarks were followed by an extended interactive question and answer session. The founder of two multi-billion dollar startups held a very honest, insightful, and engaging dialogue on entrepreneurship. He also focused his discussion on the nature of careers, and career transitions, outlining his personal path to success.

Desh Deshpande received an undergraduate engineering degree from IIT Madras in India, before attending graduate school in Canada. He received a doctorate in data communications from Queens University in 1980 and then started teaching at the school. After a year he gave up teaching to join Codex Corporation, a subsidiary of Motorola, and moved to Boston.

Desh launched his first start-up, Corel Networks, in 1988, but walked away when he and his partner disagreed on the direction of the firm, leaving without severance pay or savings and just after his wife had left her job to look after their two small children.

Mr. Deshpande told the audience the importance of this experience in creating his future success, saying, “This experience served to broaden my comfort zone.” He suggests that “fear of failure” is the biggest challenge to success. Once he went through this difficult experience he realized that failure is not as traumatic as he had imagined and it’s greatly outweighed by the joy of creating something new.

Desh tried again with Cascade Communications, a manufacturer of Internet equipment, which started in 1990 as a two-man operation with just $125,000 in seed money. This time he encountered tremendous success. By the time Mr. Deshpande sold the company in 1997 for $3.7 billion, Cascade had grown into a 900-employee giant. Desh attributes the tremendous success of Cascade, which produced 18 successful start-ups, to having a simple idea, executed brilliantly, by a very good group of people working in a great environment.

After selling Cascade, Desh was still active in entrepreneurship, meeting with and mentoring five to 10 entrepreneurs per week. After one of these meetings with two MIT students in 1997, he recognized their tremendous talent, and a great opportunity that led to his next great success: Sycamore Networks. In a little over two years, Deshpande built the company to a market valuation of over $23 billion.

In providing the audience advice for success he stressed, “You need guts and creativity. You also need to be decisive. If you don’t like the situation you’re in, get out! But, most people don’t have the guts to get out of bad working situations.”

He also stated that if you are not having success and it’s no longer fun or enjoyable, it’s your fault for continuing to do it. “The biggest gift in life is to be able to get up in the morning and be excited about going to work.” Desh continued, “The key is to be smart, stay humble, and have the tenacity to make things happen. You have to meet remarkable people, recognize their abilities and know you can build around them.”

He also admonished the audience, “Keep your eyes open; there are lots of very good people out there.”

Asked how to pick the right partners and partnerships, Desh summarized: “This choice is the biggest risk of all for an entrepreneur. Picking the right people to partner with is critical.”

However, he warned the audience not to be too cautious. Desh said he has made decisions about people fairly quickly in the past, but he has also been very quick to pull the plug if things do not work from the start. Desh warned that you cannot postpone these matters, and people management requires being aggressive, especially in an entrepreneurial environment. According to Desh, “You can’t sit on a mistake.”

When asked the importance of having broad experience early in one’s career, Desh suggested having a track record that is both deep and unique is most important. Specialization in a particular skill and being world class in that skill is more critical than being a jack-of-all-trades.

Desh described building a business as a chain. He said, “The chain can be broken by a weakness in a specific area or function, which often gets entrepreneurs in trouble. This is especially the case when the company begins to grow and the entrepreneur still expects to control everything.” He added, “The key skill is to be aware of what particular skills or competencies are holding you back, and bring someone in with that particular expertise.”
Desh also said both technical expertise and entrepreneurial spirit are critical, noting that he would not have succeeded if he did not have the technical skills early on in his career.

Globalization Club president Abhi Shah commented, “It was truly inspiring to see a superstar global entrepreneur share his story straight from the gut with simple but powerful takeaways for aspiring entrepreneurs like me. I was deeply touched by his humility in spite of having built two multi-billion dollar companies from scratch!”

Now Desh is more of a coach than an entrepreneur, no longer working 18 hours per day, seven days per week as he had for 20 years. Desh is involved in new ventures because he still enjoys bringing a group of brilliant people together to work on a great idea. Since 1998, Dash has been involved in starting one new initiative per year, including the MIT Center for Innovation (a $20 milion charitable investment), and A123, a maker of innovative new-generation rechargeable batteries.

March 1, 2006
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