Editor’s note: This is the second of a two-part Q&A interview with Vivek Wadhwa. Local Tech Wire will feature a Q&A on Tuesdays and Wednesdays. Vivek Wadhwa is known as more than just the founder and chief executive officer of Relativity Technologies. He’s also a mentor to start-up businesses and a booster for the Triangle’s tech community. He helped found TiE, a group of Indian entrepreneurs who help other entrepreneurs get started. And he always speaks his mind.

Usually upbeat, the boom and bust of the past few years, have tempered his optimism — both about the Triangle’s future and his own company’s successes. But it hasn’t knocked it cold.

“I’m cautiously optimistic,” he says. “I’ve got an eye on the rear view window as well as one on the dashboard.”

What is the market like for small start-ups in the Triangle?

This is the time to be building a company or launching a venture. Two years ago we were in a state of delusion. Kids who could hardly shave were raising $20 million after a couple of meetings. Having a good business plan was irrelevant. If you did have one you were lost in the noise because the only factor for success was selling to VCs, not selling your technology.

What’s changed because of the dot-com bubble burst?

Entrepreneurs have grown up. The biggest problem in the last five years around here was not the lack of capital, it was the lack of management experience. All these businesses starting and failing has given us a crop of seasoned entrepreneurs who know to do more than boast and brag. The venture capitalists have lost their shirts. They now know they must provide value and work closely with companies.

What makes this area so good for tech start-ups?

It’s a very fertile environment. It’s a very tech friendly area with great schools and a great standard of living. Plus, a very supportive state government. All the ingredients are here. Silicon Valley still has hassles you had before. It’s crowded and prices haven’t dropped that much.

What’s the Triangle’s tech specialty?

You have a lot of ex-IBM executives who have broad experience in hardware, software and networking. Cisco brought in a lot of networking specialties. Nortel has the telecommunications expertise.

But can people who’ve built careers in large organizations transition to working for start-ups?

Ten years ago you could forget about hiring a former IBM’er. But the company has changed. Nortel has never been a big bureaucracy.

Tell us about TiE, the Indian entrepreneurs group that mentors new companies and budding entrepreneurs?

It’s about leveraging the knowledge of people who’ve gone before you. In technology, history repeats itself. You can save energy by learning from others mistakes. The movement started in the Silicon Valley and it has been phenomenally successful. It’s a place for people to network and seek guidance from those who’ve gone before them.

How would you categorize the companies around here that have stayed alive like TogetherSoft (a software and services company) and HAHT Commerce (e-commerce software)?

Some have investors that have already poured a lot of money into the companies so they have given more to keep the company afloat. Others, like TogetherSoft, have had good business models. Belt-tightening has also been critical. You saw a lot of companies, ours included, that have done small layoffs to save capital and/or achieve profitability.

Are we back to a time when Class B office space and working at lower-than-industry salaries is the norm?

Yes, definitely. A great example of this is Percy Rajani, the head of Vedic Technologies. His company is a classic example of the new way of doing business: You build the product and then you go get the money. He’s got people working for 50 percent of what they were making. There are others working for stock. He’s using minimum capital to build his product which is a device that lets your Palm Pilot make long distance calls. We’re using it to save money on our calls to Russia (Relativity has a development team in Russia.).

Essentially, you market your company differently today than 18 months ago?

Yes. People used to look to others, to the VCs, to make their business happen. Now they look to themselves. You need to focus your energies on selling your technology, not selling to VCs.

But now that the bubble has burst and instant riches in the start-up world are not a guarantee, don’t you think Triangle start-ups will have a tougher time recruiting and retaining workers?

No, it is easier to recruit right now because there are thousands of people in the market. There is nowhere to go. Things are night and day different from where they were a year ago. People are grateful for their jobs and companies have been able to purge all the troublemakers. It’s been much more conducive to building a great team.

For Part One of the Wadhwa, click here: