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'Culture at a company is very important'

California, February 21, 2001, 20:00 hours PST: Varsha Rao has seen the rise and fall of dotcoms. Her experience holds many valuable lessons, which the chatters were eager to learn.

Ms Varsha Rao : Hi everyone, let's get started

RJ : you have real courage and fighting spirit, where do you get your motivation from
Ms Varsha Rao : I definitely have gotten my motivation from my parents. They came over from India in 1965 and 1969 to the US and have made a great life for our family here in the US and they have always taught me the benefits of hard work and creativity

VVG : What were the lessons you learnt when your website eve.com crashed? Is it demanding even in the dotcom world?
Ms Varsha Rao : Throughout the highs and lows of Eve.com I learned a tremendous amount. For example, especially at the end, I learned how important culture at a company is - it was the reason that Eve employees were willing to stay with Eve until the end because of the great culture we had built as an organization.

priyankab : hi! you are truly an inspiration to many of us...what happened why did eve.com shut down!
Ms Varsha Rao : Eve was shut down primarily because of market factors. We sold the company to new owners in May of 2000, and the new owners were forced to shut down the company six months later given the dramatic changes in the market condition. Unfortunately, it had nothing to do with how Eve was operating - we were the leader in our category for sales and traffic until the day the site was shut down.

uk : Hey Varsha tell me 1 thing what has made this boom a bane in the Internet market are people scared of shopping or have we reached a stage of saturation?
Ms Varsha Rao : If I understand your question correctly, you want to know whether the Internet is "over" or if it is still in the beginning stages - my opinion is that there is still enormous amounts of growth in the market, in the US and certainly abroad. In most parts of the world, less than 10% of the population is online and certainly less than that shopping and transacting online. So, I think we are definitely still at the beginning stages of the Internet and what we are seeing now is a correction, not the demise of the Internet.

Malvika : Hi Varsha, Where to you forsee the dotcom market leading to? Who will survive in this big shake-out?
Ms Varsha Rao : I think that the companies that will survive are the ones that have a clear path to profitability and the ones that right now have enough cash to last them to the point where they are cash flow positive. Most likely these are companies that are truly "Internet efficient" meaning companies where the Internet gives efficiency that cannot be achieved easily in the real world - a good example is Ebay.

VRD : Varsha, At the time of launch of eve.com did you not feel that the market was overcrowded with too many players, did you not feel that you may loose out someday?
Ms Varsha Rao : Actually when Eve.com was launched, we were the only player in the market and had first mover advantage. And relatively speaking, Eve.com did do the best in the beauty category compared to the other start ups - Eve was sold for a sizeable amount giving investors and employees a good financial return - while other companies simply ran out of cash and went bankcrupt.

charu : Do Indians have any distinct advantages over other people when it comes to tech & internet-related businesses?
Ms Varsha Rao : I like this question because I actually think that there are some advantages being Indian - advantages I did not even realize when I started out to do Eve. In terms of Silicon Valley there is a good network of Indians that are knowledgeable, well-connected and can help in terms of meeting the right people, etc. Also, given the fact that there have been a number of successful Indian entrepreneurs, VCs do naturally assume that Indians are hardworking and smart and well-educated which is a nice bias for VCs to have.

bond : what do you think are the prospects for online training in areas of management
Ms Varsha Rao : I can only say that Online Education has been repeated stated as a top area of interest in the coming years. There are some institutional things being done here in the US that will also help - more federal funds are going to be going to online distance programs - but in general, I believe this is an interesting area because it takes advantage of the Internet and has "Internet efficiency" as I mentioned earlier.

indian : Varsha how u define success ?
Ms Varsha Rao : Interesting question - over the past 10 years my definition of success has certainly evolved - from being things that I wanted to accomplish - like going to Harvard Business School, getting a job at McKinsey & Co., to doing things that I enjoy day to day, while I am doing the work - which is why I wanted to start Eve.com and was one of the best parts of starting my own company.

prasad : Hello I think this chat room is messed up nobody is following What other prson Says.Just they r typeing they r own Concern Can We follow one path.like we can ask varsha. and all will follow Questioning based on the Answer given ..
Ms Varsha Rao : Hi there - you seem to want to ask a question - what is it?

prassy1 : Varsha is it a big risk working in dotcom .
Ms Varsha Rao : It depends - of course there is less stability in these companies compared to ATT and GE, but I certainly think that the experience one can get at a startup can be worth the "Financial risk". Often people get several years of experience pressed into 1 year, because at a start up you are wearing many hats. On the flipside, some people say that startups are not as well organized so they don't get as good training. It does depend a little on the company. If you are on the younger side and can handle a little financial risk, I personally think it is worth it.

Naren : How will you describe the contributin of Harvard in your success
Ms Varsha Rao : I really value the education that I got at Harvard and UPenn/Wharton as well as my training at McKinsey. The skills I learned in terms of strategy, marketing, management as well as the network of contacts I built were very, very valuable. Many of the VCs we ended up getting financing from were from my business school contacts. That is why I do think that there is not hurry to start something right after undergrad - it does not hurt to work a bit and get some experience and build a network if possible. It will only help you later.

shatrudhn : What is your most valuable lession learned from the dot-com venture, that you would like to share with us ?
Ms Varsha Rao : A couple of valuable lessons - perseverance pays off. I don't know how many times people at various stages said "no" to us, or didn't think something was going to work - and all the time, it was critical to stay positive and persevere otherwise we would never have built a successful business and have been able to sell it.second major lesson - do something that you enjoy and have a passion for - starting a business is incredibly challenging and you end up working 7 days a week, almost 24 hours a day. Find something your really enjoy and don't do something just to make money. I chose an e-commerce business because I was fascinated in the interestion between technology and consumer businesses and I still am.

hrsd : , Hi varsha, After the DOT COM debacle, what do you say about the futre of the DOT COM craze??6 months back, all my friends who worked for DOT coms were proud handing out business cards. But now they are kindof ashamed to say that they work in a dot com. What do you have to say to these young people????
Ms Varsha Rao : I guess my advice is - why are you ashamed now, if you were proud then? Why did you get into this - was it just to make money - or was it to do something innovative and different. If the reason is the latter (the second), I don't think they have any reason to be ashamed. They have probably gotten great experience that they can use at their next job!

Mukesh : So it sounds like it's not the education, but just the contacts you make ... that smacks of elitism, rather than merit!!! What do you think about that????
Ms Varsha Rao : This is a harsh response! Just to clarify, I am a die hard believer in the education. And the truth is especially out here in San Francisco, it is the least elitist place I have ever been, certainly compared to New York. But it does help to know people - but let me say that it is very easy to network here given that the entrepreneurial community is quite large and helpful.

sricharansri : Hi Varsh,What do u think is the most understandable reason for dotcom downfal??and why most of them could'nt predict???
Ms Varsha Rao : The real reason in my view is that the market is having a drastic correction that is too drastic - it is now saying that nothing on the Internet (or almost nothing) will work, just like a year and a half ago it was saying that everything would work. This is why the companies that can make it through this period have a good chance of making 7it.

Ms Varsha Rao : Thank you all!

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