Monday April 16 9:15 AM ET
Family Values Help Indian Firm Weather Tech Storm - By Narayanan Madhavan

BANGALORE, India (Reuters) - With a traditional necklace and a colorful salwar-kameez suit, Kalpa Shah looks more like a trendy Indian housewife than a technology entrepreneur. There could be a link though. The 34-year-old mother of two is drawing on family values to help her Internet firm stay on course in the tough times created by an infectious U.S. technology slowdown which has hit India. "We definitely believe that having the same dream together helps,'' Shah, chief operating officer of NetGalactic Internet Solutions Pvt Ltd, told Reuters at the weekend.

NetGalactic, a company that blends various softwares to offer client specific solutions, posted 100 percent growth in sales revenues annually during the past four years and this year aims to achieve about 50 to 60 percent growth by adapting fast. Shah is not worried that the company will be buffeted by sinking dotcoms or fleeing venture capitalists. Her formula: Be flexible, rely on core technology strengths, avoid taking money that you don't need, treat staff like family and get customers through references rather than by advertising.

Shah gained experience during her 12 years in the United States where she worked at the Virginia headquarters of America Online. (NYSE:AOL - news). Four years ago, she returned with her husband who runs a separate software company and started a company that could offer quality service which she said was not common in India and won clients like computer maker Compaq (NYSE:CPQ - news). During the heady Internet boom before the dotcom bubble burst last year, NetGalactic helped set up more than 100 large web sites for clients including VitaminShoppe.com (NasdaqNM:VSHP - news) and Dole Food Company (NYSE:DOL - news). "We're a technology driven company. But at some point we had to get on with the general trend,'' Shah said.

Baby Steps

While it made money on the dotcoms, NetGalactic stayed clear of venture capital, then easily available for those with big ideas. "We want to take baby steps. We're not in a great rush,'' Shah said.

NetGalactic, which has 110 employees, did $2.5 million in sales in the year ended March, having grown around 100 percent a year since its start in a small apartment four years ago. With the winds going out of the Internet sails, NetGalactic is getting ready to pick up the oars and row. In its new scenario, the company hopes to turn its core specialization in Microsoft (NasdaqNM:MSFT - news) technologies to build knowledge management solutions to help large companies organize stray information floating in their computers. It is also planning to make software adapters that help databases based on different standards talk to each other.

"Our business focus is now to go after brick and mortar companies. Those who have real money unlike dotcoms. It's a much more stable source of revenue,'' said Paritosh Shah, the company's chief executive officer, and not related to Kalpa. He said the company was planning to open offices in Britain, Dubai and France to diversify export destinations.

With shining steel furniture and T-shirt clad programmers, NetGalactic's office, located down a Bangalore alleyway, looks inside like many in Silicon Valley. But the attitudes there could be different. The company lost only 10 percent of the staff last year compared with an industry rate of 25 to 30 percent. She said the trick was to keep the young workers challenged with interesting projects and avoid hiring the greedy types. "We check out the attitudes,'' she said.