Overcoming the conventional stumbling blocks to global success

The field of software, which is currently “eating the world”, is the great equaliser in terms of affording tech entrepreneurs the chance to reach global success in spite of the country they operate from, stated WSO2 Founder, CEO and Chief Architect Sanjiva Weerawarana.

WSO2 is an open source technology provider that offers an integrated enterprise platform for APIs, applications, and web services both locally and across the internet.

Ahead of delivering this year’s IESL Ray Wijewardene Memorial Lecture tomorrow on the topic ‘Nobody to Leader: Achieving Global Leadership with Software’, Weerawarana sat down with the Daily FT to share his views on a host of issues related to tech start-ups and finding success in the fast-growing field.

Following are excerpts of the interview:

By Malik Gunatilleke

Q: How did you get WSO2 started and what roadblocks did you hit?

A: I lived in Colombo most of my life. I was in Oman for a year, then India for another year, before moving to the US in 1985. I was in university for nine years before working for IBM from 1997 to 2001. I was based in New York during that time but then I came back to Sri Lanka though I kept my job at IBM and worked remotely.

When I came back, there was some nascent open source-related activity in Sri Lanka but not much. I quickly organised people to create open source content. At the time, everyone was saying don’t use Microsoft Windows, use Linux, but I asked what’s the point? If you’re using Linux you’re still not creating anything, you are still a drug addict – you are addicted to someone else’s technology. Open source is about giving people the opportunity to create and not be consumers. 

I started a foundation called Lanka Software Foundation – this was at the end of 2002 – which was focussed on giving Sri Lankan engineers the opportunity to create software that can reach the entire world market. We had no money. Colombo University gave us a lab and four old computers; Virtusa and John Keells gave us two people each, and that’s how we got started. I was teaching at the University of Moratuwa at the time and we used to get final year students to do various projects as well. I was still working at IBM but I soon saw that while we were creating all these things, there was no one who built a business that would make money off this stuff. I tried to convince people here to do this. I went around but no one bought the idea initially. I’m not a business guy, I’m a research guy. This led me to create WSO2. 

I quit IBM. I had a co-founder from the UK and everyone else was from here. We started with just 12 employees and now we have about 500 in the company. We’ve built a bunch of technologies and even lead the world in a variety of technologies – all made in Sri Lanka by Sri Lankan engineers.

Q: What does it mean to you to be invited to deliver the Ray Wijewardene Memorial Lecture and what key areas will you be focusing on?

A: It’s a great opportunity. When I was a kid, I remember hearing about this crazy guy on his motorbike, flying around. He was famous. Everyone knows the name. One of the interesting things about the guy is that after building his walking tractor he took the concept to Japan because that was the only way at the time to commercialise it. This is true for a certain kind of product but in terms of software it is very easy to reach a global consumer base from anywhere in the world, simply because of the internet. You don’t need to be in California or London to get it done. 

The lecture will focus on how software presents a very different opportunity to people who want to be global market leaders or innovators or inventors even though not a lot of people in Sri Lanka think like that. There are a lot of start-ups but they are tiny and focus on the Sri Lankan market. The Sri Lankan market is boring, it’s too small. If you want venture funding or investment you can’t focus on the Sri Lankan market. You have just something like three million internet users or some crazy number like that, so you have to focus on the global market.

You have to focus on global problems, not just problems you and your friend want to solve. There are some amazing companies outside Sri Lanka that have done just that. They are creating technology and are at world domination level. That’s what you have to aim for.

Q: What should Sri Lankan companies focus on to be successful in this field?

A: The thing with software is that there’s no intrinsic advantage Sri Lanka has over India, Bangladesh, Malaysia, or the US; neither do they. If you are competent, talented, have a computer and internet, you can compete. So when people talk about Sri Lanka’s advantage in this field – I don’t think that exists anymore. The raw materials necessary in this field are a computer, an internet connection, and a brain. That’s there everywhere. What we really need is to focus on creating an environment in which those people can thrive. That is what California has done really well. That’s why the Silicon Valley concept works so well – it’s from hiring and firing people, the culture, funding, treating failure as a learning experience.

In Sri Lanka, if your company fails, the way people talk about it is very different. They don’t see it as just a speed bump but are quick to condemn it. That is what we need to change. We have a relatively well educated population, we have high quality English in comparison to other countries in the region, and low cost structures – those are the comparative advantages. With tech, when you create something in Sri Lanka you sell it at world prices. 

It’s not like when you buy a shirt in Sri Lanka; with software it’s a global price and because it takes less to manufacture here than anywhere else, that’s where our massive comparative advantage comes in. Instead we like to say, the cost is low in Sri Lanka so we must sell it at a lower price, which is ridiculous, because that’s a formula for keeping the cost down forever – that is contradictory to what the country wants to achieve, which is to increase revenue and salaries. 

So how do you compete in low cost industries when the objective of the country is to go in the opposite direction? This is why we have such problems in the tea industry. In garments you see some companies creating their own brands and moving up the food chain. I say, don’t just be a contract manufacturer.

Q: Do you think investors in Sri Lanka are open to investing in start-up tech companies?

A: I don’t think there’s any shortage of money in Sri Lanka. It’s a chicken and egg problem. It’s also an easy excuse that people give. For WSO2 I have raised $ 45 million over the last 12 years and I got that from four or five investors, but to get to that, I had to pitch WSO2 myself to around 125 investors. Everybody else said no or said nothing at all, which is customary amongst investors. 

When people say ‘I tried to pitch the idea but no one wants to invest,’ I always say, ‘how many times did you try?’ There are people who are willing to fund you, but you have to find them. WSO2 was started on an open office slide deck; there was no source code, no people. I convinced people to give us money based solely on that open office slide deck. They gave me funding because they trusted me. You have to earn that. I was not born with a lot of money, you have to convince people and it’s not impossible, you just have to go out and do it.

Q: What does it take to be a successful entrepreneur?

A: The entrepreneurial architecture we have in Sri Lanka is crazy because it is based on the concept of ‘ideate’. What the hell is ideate? Thinking of a problem to solve? If you want to think of problems to solve, just live your life and when you hit a problem you have three options – 1. Complain – we do that a lot, 2. Ignore it – you’ll just get used to having the problem around, 3. Doing something about it – which is what being an innovator is about. You can’t do that by lying down in a room, closing your eyes, chanting “om” and “ideating”. That isn’t how it works. At some point whatever problem you have will irritate you enough that you go “I’m sick of waiting for someone to do something about this, I’m going to do something about it myself” – that’s an entrepreneur.

Q: Ray Wijewardene was an inventor whose work has predominantly focused on agriculture and resource management. How do you think software will affect these fields in the future?

A: Software is eating the world. Everything we do will be powered by software eventually, whether we like it or not. Aviation, medicine, AI, journalism, agriculture – it will all have a software component. Ray operated in a time that was pre-software – he physically made things. Now you still need to do that. You need planes and cars but if you look at the Tesla, you get a lot of lines of code running in it and you get 200 to 400 different computers running in it. The future is around software now.

Q: How can success in this field make a significant impact on Sri Lanka going forward?

A: I’ve always told people that you should always do what you’re passionate about but you should also know enough about software to program a bit, learn enough about genetics or gene-level operation, because that too is the future, and thirdly nanotechnology which is creating at a smaller scale. 

Ray comes from a different era. He was an amazing innovator but he was never a commercial global success, he was an individual innovator – that’s interesting in its own way but to me it’s not enough in this day and age. There’s a lot to be learnt but we need to take that a step further. One guy does all this cool stuff but how does that change a country? You have to find a way to scale. 

WSO2 has 500 people, which is nothing, it’s tiny. If we want to say we impacted the country, these 500 people should be off the charts wealthy so they can influence another 500 or 1000. Otherwise the impact is minimal. This is where software makes an impact though. It has that scalable potential and if you make it big, you can easily inspire other people.

Outsourcing, for example, is a rubbish concept for increasing per capita income. Those are crumbs. The first competitive differentiator for outsourcing is cost and the second is quality. If you have a better quality of product than someone else at the same price, then you can sell it, but if it’s cost, how can you double a salary of an employee? If you want to double our per capita income then you have to quadruple salaries in this field because you have to remember that the tea plucker’s salary cannot be doubled or else you’ll lose the tea market.

Q: What role do you think the Government should play?

A: Get the hell out of the way. There is currently no policy consistency. We encourage people to leave the country right now. You get a degree, you spend four years studying to be a software engineer, anywhere else, you can buy a car, in Sri Lanka you have no hope of buying a car.

The Government should regulate environment-related stuff, public safety, public infrastructure, and resources without corruption, purely on analytical, rational evaluation and transparency. Of course the Government has to tax; we’ve all got to pay taxes. Right now, the Government is trying to do too much. Trying to build technology solutions – that isn’t the Government’s job. They should deregulate and let people build stuff or provide the money to build it. That’s all.

Q: What advice would you give inventors and innovators in Sri Lanka?

A: Stop making excuses. If you are not in software, I wouldn’t know what to say because I don’t understand the problems you’ll face. In software, think big and then think bigger – go global and stop thinking of local problems. You’re solving problems that are interesting. Don’t subscribe to the notion that the 22-25 year olds are the entrepreneurs of the country. Yes, Mark Zuckerberg was 23 years old but he’s an exception. For every million college dropouts there’s one Mark Zuckerberg. He’s not the common case. 

There’s a reason for that in Sri Lanka, and that is that work environments here, constrain thinking and we think we need to ask approval before doing anything. That’s not how WSO2 works. You make a mistake, you need to learn and move along. Sure, if you keep making the same mistake you’re out but you need to learn from mistakes and you need an environment that allows you to do that. A 22-year-old, fresh out of university, can solve problems but they haven’t seen many problems yet. You learn problems as you go along. 

The key to being a good entrepreneur is not about identifying problems but about caring enough to solve it. I was 38 when I started WSO2, it’s a higher risk, with family obligations, but it is possible.

Pix by Ruwan Walpola