Immigrants Find Own Set of Hurdles at Family Firms FAMILY BUSINESS By JEFF WEISS, Contributing Reporter Seventy-five percent of small businesses close within the first three years. With such a high rate of failure, the difficulty of running a successful enterprise only becomes compounded when one attempts it in a foreign land. Having familiar faces surrounding you in the workplace can help provide familiarity to an aspiring immigrant entrepreneur and help mitigate the steep costs of running a business. But being an immigrant also presents its own challenges when running a family business. However, in spite of the obstacles confronting them, many immigrants throughout the Valley and elsewhere have beaten the odds and established profitable firms. You can count Natarajan “Cheenu” Srinivasan, chairman of Mission Hills-based Broadspire Inc., in the three quarters of businessmen that start companies only to watch them quickly fail. Before he co-founded Broadspire in 1990, Srinivasan’s business fortunes seemed cursed. The Indian-born Srinivasan, first came to the United States via Germany in 1969 to work as a technician for Mercedes-Benz in Virginia. Eventually, Srinivasan grew tired of working for someone else, so he founded an export company, which soon failed. Out $100,000, with a wife and young children to support, times were turbulent for Srinivasan. Deciding to give the business world another chance, Srinivasan opened up a mechanic temporary staffing business. But his second attempt was no more successful than the first and it seemed like Srinivasan would permanently join the ranks of failed entrepreneurs. But opportunity arose with the dawn of the Internet age. Srinivasan’s two sons had recently graduated from Yale and Stanford and came home abuzz with talk of the possibilities that awaited people ready to take the risks inherent in investing in a barely tapped medium. Despite Srinivasan’s vision, getting money to start the business proved quite difficult. “I couldn’t get any money, people looked at me differently. I went to the bank having been here for 20 years and they refused to give me any money. I went to two or three banks around the Valley, all receiving the same rejections,” Srinivasan said. “I felt that it was because I wasn’t a citizen, and I just didn’t get the treatment I felt I deserved. They rejected me, because they said I didn’t have enough equity, I owned a house and they said it wasn’t worth enough money for it to be sufficient collateral.” Roadblocks That wasn’t the first time in the United States where Srinivasan felt his status as an immigrant hindered his ability to get ahead in the business world. He said that at various times during his tenure working for Mercedes-Benz, he felt like had been passed up for promotions due to his accent and skin color. “Color seemed to be very important to some people 20 or 30 years ago, but seems to be a bit less important now. When I worked for somebody else somehow there was the idea that the language barrier would keep me from being able to work effectively with the American public,” Srinivasan said. “I spoke English but I had an accent and it seemed quite difficult in the service area to get promoted even if you had a particular talent. The discrimination wasn’t in getting the job, it was in going to the next level. It was discreet.” Growing tired of that, Srinivasan put $5,000 on an American Express card, and with his sons Suresh and Arun, he founded Broadspire, an IT managed services provider that delivers outsourced IT, data center outsourcing, and fully managed Web hosting services. With 45 employees, data centers in Los Angeles, Virginia, London, and Amsterdam and sales offices in Los Angeles, London, and Madras, India, the Srinivasan’s investment has returned many times over. Yet for Cheenu, the most rewarding aspect of starting a business was the opportunity to work with his children. “Having a family business has been so important to me. I raised my children the way my father raised me. We’re a really close-knit family. I wanted to keep my family like that to show my grandkids that this is the way it’s supposed to be,” Srinivasan said. “It definitely helped our chances of success because it was a family business. I am so proud of my sons. They were instrumental in the creation of the business.” Route to success Family business expert, Dennis Jaffe, a professor at Saybrook Graduate School and the author of “Working with the Ones you Love,” claims that immigrants commonly start businesses in America, as the most suitable alternative to a low-wage job. “Starting your own business is a route to success when you’re an immigrant that doesn’t want a low paying job. When you look at a convenience store, restaurant, caf & #233;, and other stores, you often find immigrant families working together. It’s the American way. It’s a path that the United States has that other countries don’t and don’t support. It’s a uniqueness and strength of our multicultural society,” Jaffe said. “When you start a business you often can’t afford to hire people because you don’t have funds for workers compensation and compliance. It’s much more profitable to have family members involved. It’s also a language and assimilation comfort.” While some immigrants come to the United States seeking unfettered business opportunity, others flee repressive governments. Morad Zarabi emigrated from Iran, shortly after the country’s 1979 fundamentalist revolution. Being Jewish, Zarabi along with hundreds of thousands of Persian Jews quickly realized that their days were numbered in the fledgling theocratic state. “It was a very difficult decision to leave Iran. We had to leave everything behind, including a lingerie business that we had founded over there. But there was a great deal of discrimination and it was growing increasingly difficult to do business,” Michael Zarabi, Morad’s son said. Within a year of arriving in America, the elder Zarabi saw the potential of the vast American market and founded Piege Inc., the parent company of Felina and Jezebel Lingerie. The company has grown significantly since its inception and currently employs 145 people at its Chatsworth headquarters. A tightly knit unit, much of the company’s success can be attributed to Morad’s sons Robert and Michael, who initially began working at Piege part-time in high school and full time after college. Robert is the company’s spokesman and directs the design team, while Michael has run the finance department since 2003. “Our experience has definitely been positive in America because of all of our success. I’m sure it would have been different if we would have stayed in Iran. We probably wouldn’t still have the business,” Michael Zarabi said.
