Starting business is like getting married 8212; Desh8217;

quot;The way you get market capitalisation these days is not based on past performance but future possibilities. To base it on the P/E multiple or any other multiple isludicrous,quot; he said. In the case of his own company, the Sycamore IPO was initially to be priced at 18. It was later revised to 38. When the got company listed it opened at a whopping 270, creating a record for the largest single-day dollar gain for a US IPO. quot;Maybe in the next five years there will be a way to evaluate these companies,quot; he added.

According to Deshpande, conviction is the most important quality an internet age entrepreneur needs to possess. Conviction in the idea and faith that it will work. quot;Because things are moving so fast, you don8217;t have time to gather data and proof to back it up.quot; Sometime back, an aspiring entrepreneur approached Deshpande with an idea. He was looking for advice on whether the idea would work. Deshpande8217;s answer was no. If the entrepreneur lacked faith in his own idea and needed reassurance from someone else, the answer was most certainly a 8216;no8217;. Deshpande may be mild mannered but his convictions are like reinforced concrete 8211; unshakable. He quit Coral, thefirst company he founded, because he believed the direction his partner had set was incorrect.

Like many of his peers and his famous brother-in-law N R Narayana Murthy of Infosys, Deshpande is a strong believer in ethics. To him, even success is governed by ethics. quot;If you start a company and it fails because you haven8217;t worked hard enough or because you weren8217;t ethical, then you deserve to be punished. But if it fails because the market hadn8217;t evolved and you made a wrong gamble, then even your competitor will hire you immediately,quot; according to Deshpande.

His mantra for success has three prime ingredients one of which is, naturally, transparency. The decision-making process should be open and transparent to all employees right from the start and throughout. quot;The gamble likely risks and rewards should be clear.quot; The other two ingredients for success are team and speed. Sycamore8217;s start-up team was more or less the same as that of Cascade Communications, Deshpande8217;s second company which he sold toAscend Communications for 3.7 billion. quot;It8217;s team, team, team all the way,quot; he replied when asked to prioritise the three ingredients for success.

In Deshpande8217;s view, the entrepreneur urge is very similar to that of a small boy waiting to ride his new bicycle: can8217;t wait to started. After selling Cascade, Deshpande planned to retire and spend time mentoring or coaching start-ups. But the entrepreneur bug had bitten him and he was restless. And that8217;s how Sycamore was founded with two scientists from Massachusetts Institute of Technology.

He believes Sycamore is a sign of the times more than anything else. Just like oil and petrol in the industrial revolution, bandwidth will fuel the economy for the next 25 years. quot;It is hard to understand why the markets give a much higher valuation to Priceline.com than to British Airways. But it was a similar issue when the industrial revolution happened. People wondered why companies which made tractors should be valued higher than agriculture.

quot; Deshpande alsobelieves people are the key in the IT revolution and India will play an active role in it. quot;India didn8217;t have a chance to participate in the industrial revolution. The IT revolution will be on a bigger scale and much faster.quot;