**OT**Deshpande networks success: Sycamore chief pushes immigrant start-ups
by Cromwell Schubarth
Sunday, February 20, 2000
Gururaj ``Desh' Deshpande left India in 1973, armed with a scholarship to study at the University of New Brunswick and a dream.
When he returned to his native country earlier this month, Deshpande, the 48-year-old chairman of Sycamore Networks in Chelmsford, was greeted as the richest Indian on the planet.
``Billionaire computer genius' was the automatic tag line after Deshpande's name in stories written about him in the land where he was born.
Yet he was relatively unknown there before his fiber-optic network company went public in October in one of the most successful stock offerings of 1999.
The unassuming, professorial Deshpande's personal worth jumped to more than $3 billion when Sycamore, his third start-up, went public. His value on paper, split between personal and family trust holdings in stock, is pegged at $5 billion to $6 billion today, thanks to a steady rise in Sycamore shares.
In his modest, windowless office marked only by a shingle with his name outside the door, Deshpande was clearly uncomfortable last week when asked about the idolatry of his former countrymen, enamored of his sudden wealth.
``The important story isn't this stuff about whether I am the richest Indian or if it's (Azim) Premji,' Deshpande said, referring to the head of Indian computer services giant, Wipro Ltd., whose estimated net worth of about $2.8 billion the Sycamore co-founder has far surpassed.
``What's important is the excitement about information technology and how this is something that can provide a bright future for many people in India,' he said, warming with a quick smile to his favorite topic.
Deshpande holds in highest regard the accomplishment of his brother-in-law, Narayana Murthy, whose Infosys Technologies software company has amassed nearly the same $30 billion market capitalization in India as Sycamore has in the U.S.
``To do that there is much more impressive to me,' Deshpande said. ``And Murthy is also held in very high respect there because information technology is recognized as the way of the future.'
It wasn't that way when Deshpande left his studies at the India Institute of Technology for graduate school in Canada 27 years ago.
``There are many more people preparing for a career in computers than there was then and the Indian states are all competing heavily for their talents now,' he said. ``It wasn't valued very highly when I left.'
Deshpande taught in Canada while continuing his studies, eventually getting a Ph.D in 1979 from Queens University.
After four years with Motorola in Toronto, in which his unit grew from 20 to 500 people, Deshpande was ready to break out on his own. But the would-be entrepreneur needed to move closer to where he could find financial backing.
The Boston area's wealth of venture capitalists and its history of backing successful computer companies lured him to Massachusetts in 1984.
``Nowhere in the world except here and in the Silicon Valley could somebody say, `I have an idea for a company, give me $5 million,' ' Deshpande said.
This allure has drawn many Indian and Asian entrepreneurs like Deshpande to the United States. A study written by Concord, Mass., native AnnaLee Saxenian last year found that nearly one-third of new technology companies founded in the Silicon Valley from 1995 to 1998 were launched by Chinese or Indian immigrants.
Deshpande's first start-up, Coral Network Corp., a telecommunications firm, was founded in 1988. It grew into a $4 million business in six months, but a disagreement with his partner over control forced Deshpande out.
``That was very hard, because at the time my wife had quit her job and I was bringing home very little because everything was going into the business,' he said. ``There we were, two unemployed people with lots of debts.'
Deshpande's breakthrough company, Cascade Communications of Westford, was founded shortly after that in 1990. After seven years, more than 70 percent of all Internet traffic was going through Cascade equipment. It grew to 900 employees and $500 million in annual revenue by the time it was sold to Ascend Communications for $3.6 billion.
His fortune made, Deshpande tried the easier life of investing and sitting on corporate boards.
He spent more time with his wife, Jaishree, and their teenage sons, Pawan and Ashwin, in their Andover home.
But his entrepreneurial urge proved too strong. In early 1998, Deshpande dove into his third start-up, co-founding Sycamore with several former Cascade colleagues.
``Being an entrepreneur is a career, not something you do once, make a lot of money and retire,' Deshpande said. ``Entrepreneurism is the best form of social activism. You can make good things happen with very little resources.'
Deshpande carried that message back to India this month, where he spoke to several business groups and has repeated it often to young people he has taken under his wing.
``He is our high-tech guru,' said Devi Bheemappa, co-founder of TrueAdvantage.com of Westboro, an on-line marketing company Deshpande helped her start.
Deshpande and Bheemappa come from the same village. But she didn't get to meet him until she attended a meeting of The Indus Entrepreneurs (TIE) Atlantic group which Deshpande co-founded to encourage fellow immigrants to start their own companies.
``Everybody in India who aspires to a technological career is inspired by Desh and, after his success with Sycamore, many more know of him,' she said.
``We have all heard his message, that to succeed, you need a dream and a dollar,' she said. ``If you have a big idea and can put together an A-class team, you can succeed, is what he is always telling us.'
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