Amir Khan | Crain's Silicon Valley

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Amir Khan

Background:  

San Jose, Calif.-based Viptela provides software that connects enterprise networks across wide geographic distances.

The Mistake:

I benefited from starting my company, Viptela, relatively late in my career. I’ve learned a lot working at different companies and startups.

I was with Procket Networks in 2001 after we started the company in 1999. Cisco and Juniper were there already in the [router technology] market. We were the No. 3 player.

Our customers wanted us to be successful. We had a product that addressed the market incrementally. Our solution was faster, better and more robust. But the problem was we didn’t have enough differentiation.

So, when we went through the downturn, we did not solve a major pain point for the customer. Customers don’t want to spend on something new—they wanted to be more conservative.

It’s like the experience I had in the early days of Cisco, in the early 1990s, when they were nimble and innovative. However, they became stagnant over time because they had existing functionality they had to support. Innovation became an afterthought.

If anything comes along that disrupts the existing business, big companies shy away from it. This gives opportunities for smaller companies to come in.

Big companies shy away from disruption. This gives opportunities for smaller companies to come in.

The Lesson:

This was one of the key reasons I had to ... get this company started and do something creative. I saw an opportunity when the transition to the cloud started happening.

The cost of building network infrastructure is getting higher and security is a key need for customers. This area is ripe for taking off; the infrastructure is brand new and catering to the needs of customers. This will evolve during the next 10 to 20 years to become a market in itself.

We’ve raised more than $100 million, so we’ve benefited from the market evolution.

Follow Viptela on Twitter at @Viptela.

Photo courtesy of Viptela.