You have just set up a Bangalore development center for your company PurpleYogi Inc. What kind of opportunities are you looking for in the Indian market besides leveraging the IT pool?
Pumping in real information that allows one to gain access to content that he needs is the key idea that PurpleYogi is looking at tapping. The information out there on the Net is unstructured and vast, and the whole idea is to connect content to content, people to people and content to people through this same medium. While initially PurpleYogi was looking at India as more of a development and R&D center, we are already transforming ourselves from an R&D focussed organisation in India to a complete sales company. This certainly means that the Indian market has opened up to our business much faster than expected.

Many key venture capitalists like yourself are now actively heading companies that you fund. What is the key motive behind this move? Will this not lead to conflicts between Rakesh the investor and Rakesh the CEO?
As an investor, it is fun for me to invest in new start-ups that hope to develop and create history through breakthrough technology. As an employee (in this case a CEO of the firm), I look at adding value to the business.

While ideally one would not want any conflicts, there probably is a need for productive conflicts that help strengthen the management and the business.

What is your advice to entrepreneurs, given that there is an entrepreneurial boom in India at this point?
Always check motivation levels before jumping into a venture. Another important thing is to ask yourself why you are doing whatever it is that you are doing. Silicon Valley incidentally has an alomost 97 per cent failure rate, a figure that is likely to be much higher in India at this point and therefore making money is not the most important objective. In the case of a new business venture, it is not automatic to make money, rather it is automatic to fail, so one must remember that.

What is the time frame that one can give a business for results to start showing up?
Well in the first year, one sees nothing. In the second year, revenues start to come in while the third year should clearly prove to be an indicator of the direction the business is taking. At that point if you don't see anything happening, forget it and move. Also as an entrepreneur, one should be open to ideas and should the case demand, allow a more experienced hand to run your business. Always try to protect your company and not your job.

What are your thoughts on the whole business of making a sale based on significant valuations?
Its never easy in the first place to create a successful business. Innovation and creating breakthrough technologies/business models are the key. One cannot sell to make money only based on valuations. If one were to analyse all the major deals that happened in the IT industry (especially Internet-related) each business would have been an innovative one backed by a good management team. A good management, a great product and a great team form the key lifeline for a business, otherwise you don't have a good business at all.