“The climate crisis is brought on by technology and its solution will come only through technology”.

Venktesh Shukla (Venk) is General Partner of Silicon Valley based Monta Vista Capital. An early stage venture fund, which invests in companies that leverage AI/ML, blockchain and self-driving systems to transform industries. Portfolio of previous fund included companies solving problems in big data, hybrid cloud, cyber security for preventing data theft and bot attacks, digital marketing, power consumption in mobile and IOT devices as well as automated support through AI bots.

As past President of TiE Silicon Valley and Chairman of TiE Global, Venktesh presided over one of the most powerful networks focused on technology, innovation, and entrepreneurship in Silicon Valley and beyond. TiE, with 61 chapters across 18 countries, exists to promote wealth creation through entrepreneurship. Its membership includes the entire ecosystem of VCs, successful entrepreneurs, senior executives in public companies as well as budding entrepreneurs.

He has also worked with several state governments in India to help craft their policies on startups and to host them during their visits to Silicon Valley. He assists Ministry of Science and Technology on leveraging the diaspora for innovation in science and technology in India.

Venktesh is currently trustee of Foundation for Excellence India Trust (www.ffe.org). He was its founding President for the first 18 years. It has provided scholarship to over 17,000 talented but needy students and enabled them to become engineers and doctors in India. He holds an MBA from MIT Sloan School of Management and a B.E in Electronics Engineering from NIT Bhopal.

Praveen Gupta: What has transformed the Silicon Valley into a big theatre for South Asians?

Venktesh Shukla:  The biggest attraction was the concentration of good quality jobs in this area. If you were relocating from another area, you did not have to worry too much whether the job you are going for will work out for you. If it did not, you knew that there were plenty of other companies in a small geography where you could try your luck. This is quite different from any other geography in US where a city or a region will have only one or two good companies that could hire you.

If you were relocating from another area, you did not have to worry too much whether the job you are going for will work out for you.

To a smaller extent, Boston area had similar concentration, but it was not the most desirable place for Desis from the weather standpoint.  Boston lost its edge in the 90’s as it completely missed the internet revolution, and the difference in scale of opportunities between the two regions kept getting bigger. Once people get used to Silicon Valley, it is hard to leave the area thanks to its excellent climate, great education infrastructure, concentration of Indian grocery stores and restaurants and richness and variety of cultural activity from all parts of India.

PG: Do you see the possibility of replicating this in India?

VS: To some extent, it has already happened in pockets like Bangalore, the NCR, Hyderabad, and Pune. It is difficult to achieve the scale of Silicon Valley though – not just for India but for any other part of the world. Part of Silicon Valley’s attraction is its openness to talent from all over the world – there are 90+ nationalities represented in the Valley! It also helps that there are two world class universities that have figured out a way to commercialize their innovation.

The biggest strength of Valley now is that most of the potential acquirers of a tech startup are right here so better chances of getting in front of decision makers. Prolific acquirers such as Google, Facebook, Twitter, Apple, Salesforce, VMware, Cisco, Oracle, Splunk, Palo Alto Networks, Visa, Intuit, PayPal, eBay, ServiceNow are located here. Companies that are not headquartered here but nevertheless have a massive presence in the Valley are IBM, Microsoft, Amazon, SAP, and many others.

The biggest strength of Valley now is that most of the potential acquirers of a tech startup are right here so better chances of getting in front of decision makers.

PG: How is the Valley addressing some of the toxic issues which have been a recurring theme?

VS: For the last few years, Valley companies particularly social media companies like Facebook, Instagram, Twitter, and Google to a smaller extent, have been accused of not doing enough to police content on their platforms. Until recently, their defense was that they are not media companies and as such they should not be expected to exercise editorial oversight over what appears on their platform. They claimed that their appeal lies in the fact that are mere platforms that enable anyone to post anything. The outrage that followed the revelation of manipulation of Facebook data for US Presidential Election in 2016 by Cambridge Analytica and Russians put pressure on these companies to accept some responsibility for what appears on their platform.

Gradually, a bipartisan consensus appears to be emerging to hold these companies liable for the content on their platforms or to regulate them outright just as electricity, telephone and cable companies are regulated.  Other issues that get attention are inadequate representation of women and minorities (other than Indian and Chinese of course) in tech companies. These are complex social issues that defy easy solutions. It is easy to pay lip service but making a fundamental difference is hard. 

Gradually, a bipartisan consensus appears to be emerging to hold these companies liable for the content on their platforms or to regulate them outright… Other issues that get attention are inadequate representation of women and minorities… in tech companies.

PG: As a VC how do you ensure that valuations do not tend to dominate a business model?

VS: Valuations are a function of supply and demand and they also depend on the skills of the negotiators. If the valuation is not justified by fundamentals, sooner or later there is a reckoning of truth. Everyone saw what happened with WeWork and other overhyped companies. Oyo was a great company with a pioneering business model until Softbank got involved. The pressure to grow at a much faster pace made Oyo change its business model and assume much greater risk which was brutally exposed with the collapse of travel after Covid. Not clear though what could be changed here – all investing is in the final analysis an emotional act and sometimes emotions get way ahead of your judgment. 

Oyo was a great company with a pioneering business model until Softbank got involved...all investing is in the final analysis an emotional act and sometimes emotions get way ahead of your judgment. 

PG: To what extent has COVID-19 put the VC boom on hold? It is being said that the next wave of startups is expected to ditch the ‘unicorn’ envy and strive to be ‘camels’?

VS: What has happened over the years is that venture capital has emerged as an asset class by itself in the asset allocation model that deep pocket investors use. If the overall capital base increases, the funding available to the venture capital community increases proportionately. The capital base keeps increasing regardless of the prevalent market conditions because most of these are pension and retirement funds that grow every year. What that means is that the pool of venture capital available for investment has not been dented in this crisis. Funds are available but the psychology of the venture investment community has changed. They are more cautious now and there is greater emphasis on fundamentals. It is the behavior of the investment community that had given rise to the obsession with Unicorns and it is this behavior that is undergoing change. 

It is the behavior of the investment community that had given rise to the obsession with Unicorns and it is this behavior that is undergoing change. 

PG: The ‘migrant crisis’ demonstrates that India also needs ‘smart’ villages. Like the rest of the country they need jobs, healthcare, vocational training. The metro cities are bursting from the seams. The virus driven ‘WFH’ model has shown that not everyone needs to live in the big cities. Any thoughts?

VS: It seems to me that the idea of a self-sufficient and smart village is a mirage. Throughout the history of the world, it is the cities that have produced the finest writers, poets, artists, scientists, engineers, and other professionals. In other words, it is the cities that are the cradle of civilization. It is far cheaper to provide basic services such as jobs, housing, water, electricity, health, education per capita in a city than in sparsely populated villages. Therefore, much less adverse impact on climate. If the cities are bursting at the seams, it is a failure of governance rather than a failure of city model for development per se. In most of the other countries, as many as 70% of the population lives in big urban areas. If all these other countries have managed it, India should be able to manage it as well. 

If the cities are bursting at the seams, it is a failure of governance rather than a failure of city model… If all these other countries have managed it, India should be able to manage it as well. 

PG: India is the third largest emitter of CO2 in the world. The middle class aspires to live an American dream. Does that not run counter to sustainability?

VS: Of course, it does. Everyone wants the conveniences of modern life. And why should they be denied? The climate crisis is brought on by technology and its solution will come only through technology. Government policy, individual initiatives and societal restraint will have impact only on the margins, but it will not be a game changer. For example, no hand wringing was enough to stop countries from building coal fired power plants. Now that the solar and wind power is cheaper to produce, justifying a new coal fired power plant is becoming increasingly difficult. Government policy, climate treaties, and climate activism so far had only marginal impact but shift in technology made a much bigger difference.

No hand wringing was enough to stop countries from building coal fired power plants. Now that the solar and wind power is cheaper to produce, justifying a new coal fired power plant is becoming increasingly difficult.

PG: Can the Valley play a transformational role for India?

VS:  How much transformation takes place really depends on India itself. There is no shortage of talent or ideas or desire to change in India. The best thing that has happened to India in the last few years is emergence of startups as drivers of change and innovation. And they are the best hopes for transformation of India. All that India must do is adopt best practices from around the world for nurturing startups and sit and watch. There has been progress in ease of doing business but the regulations in India are still such that it is holding up the transformation of India as an innovation powerhouse. Without innovation, no country in the world has ever become prosperous except for those with the petrodollars.

The regulations in India are… holding up the transformation… as an innovation powerhouse. Without innovation, no country in the world has ever become prosperous except for those with the petrodollars.

PG: Would the pandemic trigger automation with higher application of AI/ ML?

VS: The enthusiasm for AI/ML was already there and the Covid is only accelerating the trend. The need for automation has grown to spare human contact or to spare humans from going to the office.

PG: Many thanks and best wishes for your leadership, Venk!