Kanwal Rekhi
Our third honoree… help put a new face on Silicon Valley's picture of success.
Kanwal Rekhi made his millions by launching and then selling his own start-up. But he found out in a rather devastating way that his image (translate that to ethnicity) was considered detrimental to the Silicon Valley success story and he was forced to take a lower profile in his own company.
It was an episode that would eventually lead him to re-establish the roots he had forsaken in coming to America and in turn, helped sprout a whole new generation of East Indian entrepreneurs, so that today, the Indian face is very visible on the frontline of our world-famous high-tech industry.
Kanwal Rekhi was born in 1945 in Rawalpindi… the third of eight children of an Indian army officer. Within two years of his birth, Kanwal's family fled the newly partitioned Muslim Pakistan with little more than the clothes on their backs and settled in Kanpur, India.
After what he described as a middle-class upbringing with an emphasis on education, Kanwal graduated from the highly-esteemed IIT Bombay with a Bachelors in Electrical Engineering.
He came to America to earn a Masters in Electrical Engineering at Michigan Tech University.
Newly arrived, he recalls having only $10 in his pocket. He found a room at the YMCA for $4 a night. That first day, he found a job washing dishes for $1.25 per hour. After a full day's work, with meal provided, he had earned $10… and that's when he knew he could survive in America. "I had a place to sleep, food in my stomach, a little extra money in my pocket… and a sense of purpose," Kanwal said.
He took on odd jobs at night as a busboy, doorman and even factory welder.
While he was still in school, he somehow struck up a pen pal relationship with an American-born woman named Ann Holt who would soon join the Air Force. They corresponded for three years before they actually met. Within a few weeks of their meeting, they decided to get married. By this time, he had gotten his Master's degree and was working as a computer engineer. He made a promise to Ann that they would be well off by the time he was 40.
They moved to San Jose and several engineering jobs later, at the age of 36, Kanwal, along with two Indian colleagues, started Excelan, a computer networking company. Kanwal ran the company for awhile and worked hard to fit the role of American CEO, shaving his beard, buying lots of suits and white shirts and taking speech therapy. He was named Entrepreneur of the Year by Venture Magazine in 1987. But when it was time for the company to go public in 1987 and Kanwal and his Indian partners met with about 100 venture capitalists to raise money… they consistently heard the same objection from the investors -- that the company lacked the right manager, it needed someone to look the part and play well to Wall Street. They were happy with Kanwal's performance as chief executive. It was just a matter of what face to put on the company. It wasn't hard for Kanwal to decipher the hidden message. Before Excelan went public, the backers asked Kanwal to step down as CEO in favor of a retired Hewlett-Packard executive. He was told the move would preserve his investment… that his own net worth would be at risk if the stock didn't fly.
The company went public… it was a successful IPO, but the newly-hired HP executive didn't work out and within a year, Kanwal moved back in the top job…. until a year later, in 1989, when Excelan was sold to Novell for $210 million dollars.
Kanwal was 41… he was a year late, but he had basically kept his promise to Ann.
Again, though, he was elbowed out of the top job… and then passed over when the CEO position was vacated yet again. Years later, one investor admits the board probably should have let Kanwal run the company.
"Back then, Indians weren't perceived as winning CEO's," this investor told Fortune magazine. "We didn't know if people would trust them as managers," he said.
After one rebuff too many, for reasons that had little to do with merit, Kanwal left Novell in 1995. He felt burned out, his children were growing too quickly, so he took his family on a long road trip -- covering six to seven thousand miles in 30 days.
Back home after a whirlwind tour of America, with no job to go to, Kanwal was told by Ann go somewhere-anywhere--during the day and come home in the evening. He turned to a group called TIE which he had helped start in 1992. TIE stands for The IndUS Entrepreneurs, a Silicon Valley based non-profit support network that helps bring young Indian entrepreneurs along, providing advice, contacts and funding. Up until now, Kanwal had not been too active in TIE. In fact, he said, "I was as de-Indianized as anybody," having moved to America, married an American, followed the American track to success, gone to football and baseball games and kept up with American politics. "India wasn't a part of my life, he said.
But that was about to change dramatically. Word got around that the former Chief Technology Officer of Novell was available as a resource… and Kanwal was soon advising 8 to 10 entrepreneurs a day who sought him out. These daily interactions and the much-appreciated mentoring began to stoke the fires of this once burned out man. He saw his mission in advancing Indian entrepreneurship and wealth creation as a way to gain clout for his community. He was determined to show that Indians can run companies as well as engineer them. TIE sprung up new chapters across the country and to date, its entrepreneurs have created $75 billion dollars in new market capitalization.
Since his Excelan days, Kanwal has witnessed and indeed helped bring about the emergence of Indians in upper management and given them a voice at the highest levels. A recent Business Week article reported that 40 percent of Silicon Valley startups have Indians in high positions.
Today, Kanwal Rekhi is a key investor in and a sage to the Valley's affluent Indian community. He has funded 15 companies as of 1998.
Having succeeded as an economic entrepreneur, he has become a social entrepreneur, investing to have an impact on society.
Kanwal says, "As a Sikh, I believe that you work hard to make an honest living, you thank God for your good fortune, and you share your wealth with others. But rather than just give someone help for today and making them happy for that one day," he said, "you can give them the chance for an education and set them up for life."
Because education was so essential in his success, Kanwal pledged $5 million dollars to the Foundation for Excellence, which identifies bright, but poor students in India and pays for their college tuition AND living expenses, so that they don't burden their families. The Foundation has funded more than 1,500 students so far. Kanwal's particular interest is in supporting disadvantaged girls. "That's how you leverage education for the whole family," he said. "If you educate a boy, you have educated a person. If you educate a girl, you educate a family down the road."
In addition, Kanwal donated $5 million dollars to his alma mater in Michigan as well as $5 million dollars to his alma mater in India, IIT Bombay to ensure quality education for coming generations. His donation in Bombay, in particular, made a splash because giving money to your old school was an unfamiliar practice in India up until now. In fact, when Kanwal first went back to his university, he was shocked at how rundown it was. That discovery prompted his gift to the school. Others have since followed Kanwal's gesture, and Kanwal has helped raise nearly $200 million dollars for higher education in India.
In fact, Kanwal now travels to India every other month to help bring America's free market ways to India. He sees that as the avenue to success for India as a nation. He has met resistance to be sure, but says he's making inroads. His goal now, he says, is to "help transform India in my lifetime."
Just recently, he returned from a worldwide TiE conference, where he's been named chairman of Global TiE with its 30 chapters.
Kanwal, who is well off enough that he never has to make another dime in his life, says he's looking to be paid in another way. "A man needs to be paid, whether it is financial payment or emotional payment. I have more money than anybody can consume in 1,000 lifetimes. So I am using my resources to get the emotional satisfaction of being able to help, to make a difference."