MS Sparsha
Before the dotcom bubble burst and erased billions of dollars in paper wealth, a Hubballi-born entrepreneur had already become a central figure in one of the most spectacular public-market debuts in telecommunications history. But the more remarkable part of Gururaj “Desh” Deshpande’s story is what he did after the bubble burst.
An alumnus of IIT Madras, the University of New Brunswick and Queen’s University, Deshpande was a serial entrepreneur long before his name became associated with the telecom boom.
In 1990, he co-founded Cascade Communications, a company that developed Frame Relay and ATM switches used in the rapidly evolving telecommunications infrastructure of the era. As Internet traffic began expanding, such networking equipment became part of the plumbing that enabled data to move across increasingly complex networks.
Cascade was acquired by Ascend Communications in 1997 for $3.7 billion. But Deshpande did not retire on his success. In February 1998, he joined Daniel Smith, Rick Barry and Eric Swanson in founding Sycamore Networks in Massachusetts.
The timing was extraordinary. Global telecommunications traffic was exploding. Carriers were investing heavily in fibre-optic networks, yet managing and provisioning bandwidth across increasingly complicated systems was becoming a major challenge. Sycamore entered a fiercely competitive market dominated by established names such as Lucent, Nortel and Ciena.
Its proposition was intelligent optical networking—combining optical switching with software capable of managing bandwidth and accelerating network provisioning.
Then came October 22, 1999.
Sycamore Networks went public on NASDAQ under the ticker SCMR at $38 a share. The stock opened dramatically higher and reached an intraday peak of more than $270 before closing at $184.75—an extraordinary first-day gain of about 386 per cent.
The numbers were staggering. Sycamore ended its first trading day with a market capitalisation of roughly $14.4 billion, making it, at the time, the largest first-day market capitalisation for an Internet-related company. Yet the contrast was equally striking: Sycamore had reported only $11.3 million in fiscal 1999 revenue, with Williams Communications as its principal early customer.
The market was pricing the future.
For a brief period, that future appeared limitless. But the telecom boom was built on assumptions that proved unsustainable. When the telecom crash struck in 2000–01, carrier capital expenditure collapsed. The extraordinary valuations of companies such as Sycamore fell sharply with them. The company eventually wound down its operations years later.
For many entrepreneurs, that might have been the end of the story.
For Deshpande, it became a turning point.
In January 2002, Deshpande and his wife, Jaishree, pledged $20 million to establish the Deshpande Center for Technological Innovation at MIT, with the aim of helping promising academic research cross the difficult gap between laboratory discovery and commercial application.
But his larger mission was taking shape back home.
In 2007, Deshpande launched the Hubballi Sandbox in North Karnataka as a living laboratory for addressing regional challenges through entrepreneurship and innovation. Its focus extended across agriculture, skills development, micro-enterprises and social entrepreneurship.
The initiative subsequently gave birth to programmes such as Navodyami, launched in 2011 to help small regional businesses grow. The annual Development Dialogue, first held in 2008, brought social entrepreneurs, investors and development practitioners to Hubballi, placing a relatively small North Karnataka city on an international innovation map.
The model expanded further. Beginning with operations associated with the BVB campus, the incubation ecosystem developed into what became Deshpande Startups, formally established as FSSI in 2016. A dedicated six-acre incubation campus near Hubballi Airport added prototyping facilities and industrial sheds. The DST-recognised Technology Business Incubator went on to support startups emerging from the region, including Nanopix, known for automated cashew-grading technology and export customers.
The model did not remain confined to Karnataka. Its approach was also extended to other regions, including Nizamabad in Telangana through KREST.
Deshpande’s journey therefore offers a lesson that goes well beyond the spectacular numbers of the telecom boom.
He helped build some of the technological infrastructure behind the early Internet era, experienced the extraordinary rise of a $14-billion market valuation, and then watched the telecom bubble deflate.
But instead of spending the rest of his career chasing the next bubble, he turned his attention to something less glamorous but potentially more enduring—institutions, entrepreneurs, skills, technology and regional development.
Markets can create extraordinary wealth and destroy it just as quickly. Institutions, however, can create possibilities that survive market cycles.
That may ultimately be the more enduring legacy of Gururaj “Desh” Deshpande: not the billions attached to a spectacular IPO, but the ecosystem he has spent years building after the bubble burst.
