Bitten by the startup bug, Indians in the US are morphing into entrepreneurs. - Ramesh

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Bitten by th he starttup bugg, Indiaans in the t US are morpphing in nto enttreprenneurs Gettyy Images Concept by Muhabit ul haq Synopsis s Indian te echies, who moved m to the e US amid thhe Y2K crisis s and made a good livingg, are now turning entrepreneur e rs. More Indian professio onals are starting companies in the US U than everr before. However, H cre eating scalab ble global com mpanies like Google, Faccebook, Airbnb, or Uber is still a brid dge too far. By SHELLEY SINGH S 14 Mins R Read, Mar 02, 2022, 12:01 1 AM IST When Nishant N Nair, N an engineer froom Datta Meghe M Coollege in Mumbai, M started working ata Wipro in Bengalluru, he diidn’t have any ‘planns’ to becoome a foundder. A yeaar into the job, j he moved m to thhe US, whhere he hadd stints at top compannies such as GE, Quualcomm, LinkedInn, and Yelpp customising businesss-softwarre applicattions. Thaat’s when heh saw ann opportunnity to builld an enteerprise-moonetisationn platform m, or a plattform to manage m subbscriptionn services. In 20166, Nair staarted RecV Vue, a recuurring billling- and revenue-so r olutions provideer for busiinesses. Thhe startupp raised aroound USD D20 millioon betweenn 2017 annd 2021 frrom three US-basedd venture capital c (V VC) funds — Cota Capitall, Epic Ventures, annd Long Light Capittal. The Paalo Alto, California C a- based firm f now employs e 1 peoplee, and Naiir now hass big ‘planns’. 100 “Our goal is to be a leader in this space,” he says. Shub Bhowmick, an engineer from the Indian Institute of Technology, Banaras Hindu University (IIT-BHU), spent a couple of years making biscuits at Britannia Industries in Mumbai after graduation. “It wasn’t a fun job,” Bhowmick recalls. He joined Infosys in 1998 and three years later moved to the US on a work visa. In 2013, Bhowmick teamed up with his BHU batchmate Sumit Mehra, and Shashank Dubey, whom he had met during his brief stint at Mu Sigma, to start Tredence. The California-based analytics platform now employs 1,500 people and has 30-40 Fortune 500 companies among its clients across retail, consumer goods, and hospitality sectors. Nair and Bhowmick are among the growing list of Indian immigrants in the US who are starting companies, mostly in the B2B space. Others include Baiju Bhatt, co-founder and CEO of stock-trading app Robinhood; Rohan Seth, co-founder of social audio app Clubhouse; and Apoorva Mehta, founder and CEO of grocery-delivery firm Instacart. According to Ashish Gupta, who co-founded Gurugram-based research and data insights firm Benori Knowledge in 2019, around 25% of his IIT Delhi batchmates who passed out in 1995 and went to the US have started their own companies over the last few years. So, what’s fuelling this trend? Shorter transition time To be sure, the US startup ecosystem is no stranger to Indian entrepreneurs. The first generation of Indian tech entrepreneurs arrived in the US in the 1980s. In 1982, Vinod Khosla co-founded Sun Microsystems with his American counterparts, while Sabeer Bhatia founded Hotmail in 1996 and sold it to Microsoft a year later. There have been other ventures as well, set up before the turn of the century, such as Internet-equipment manufacturer co-founded by Gururaj Deshpande, Sycamore Networks, which folded up quickly due to lack of innovation. The trend of Indians founding companies has accelerated in the recent years and this is also reflected in the number of unicorns they have created. In the US, Indian entrepreneurs have built 90 unicorns over the last eight to 10 years. A major reason for this trend is that the transition time taken by Indians in switching from employment to setting up their own businesses has more than halved. If earlier it took two decades for Indians to set up their own ventures after moving to the US, they mostly do it in less than 10 years now. Besides, now the India playbook has a bigger role to play in the American startup ecosystem since most businesses in the country have small but significant research and development (R&D) centres in Bengaluru or Hyderabad. Meanwhile, most ventures by Indians are in the B2B space, as they continue to stay away from the more challenging and high-cash burn B2C ideas. This is changing, albeit slowly. However, despite this accelerating trend in startups founded by Indians, two important things are still missing. First, the share of startups founded by Indian women in the US is negligible. Second, Indian startups are not necessarily equipped with the ability to scale ideas just like Amazon, Facebook, Twitter, Google, Airbnb, or Uber, and hence fall short of creating companies with an eye on the global markets. But that is likely to change soon. Sivakumar Ramamurthy, co-founder of Portland, Oregon-based Pragya Ventures, says, “The tools have changed, the ecosystem has changed, and more importantly the understanding of data has changed. Now there’s a good chance that Indians will create scalable ventures.” Ramamurthy had worked with chipmaker Intel for almost three decades before starting Pragya Ventures in 2019, an incubation and investment platform under which he is co-creating companies with entrepreneurs, mostly Indians, in the US. A bigger market play The scale of opportunity that the US offers is of course far bigger than in India. There are more than 2,000 VC funds in the US (India has under 100) that have invested over USD164 billion in more than 10,000 startups in 2020 alone, says Pankaj Jethwani, executive vice-president at W Health Ventures, a Boston-based VC firm. The market size, for say healthcare, is 10x bigger than in India (at approximately USD4 trillion as against USD400 billion in India). “The go-to-market playbook in the US is more mature compared to that in India for founders of digital-health firms,” adds Jethwani. But despite the size and scale of opportunities, the starting point for Indians in the US is higher education and employment. For instance, like most of his compatriots who have founded companies in the US, Sachin Alug, founder and CEO of Alpharetta, Georgia-based NLB Services, too, studied management in the US and started working with GE. It was during the Lehman Brothers collapse and the financial meltdown of 2008-09 that he spotted an opportunity in the fragmented talent market and upskilling, the focus areas for his venture. NLB has more than 100 customers including banks, pharma companies, and logistics and supply-chain firms. “I personally had to adapt during the first few years — from learning to do your own thing to understanding different parts of the country. Once you get that, access and openness are healthy,” says Alug. Tredence co-founder Bhowmick had taken the typical engineering-plus-MBA route to climb the corporate ladder in consulting firms — a far cry from making biscuits in Britannia when he was in Mumbai. Working in the US, he always wanted to start a company of his own. Growing demand for analytics and a talent gap in the space made him and two fellow Indians quit their jobs to start Tredence. Though capital was not a problem for them, getting the first few clients was. “That meant a lot of proof of concepts, a lot of diagnostics, and we had to significantly discount our work in those initial years,” recalls Bhowmick. Slowly, Tredence started breaking into the big league, getting large clients and repeat business. “It’s about making sure we hire the right talent and build that one Tredence culture,” he adds. For Nair, the sole founder of RecVue, the initial challenge was to look after everything from sales, marketing, engineering, human resources, and then tie it all together. “I always felt that a good product wins. But it wins only if there’s proper execution to back it. That calls for a lot of hard work to get tech right and figure out the market,” says Nair. Of course, like anywhere else, market changes leading to layoffs or even shutdowns can also be difficult, as the Indian-American founder-CEO of mortgage platform Better.com found out. Vishal Garg terminated 900 or 9% of his 10,000-employee workforce over a Zoom call in December 2021. This was just after a USD750 million capital infusion led by SoftBank. MR Rangaswami, founder of Indiaspora, a California-based network of global Indian-origin business leaders formed in 2012, believes the challenge for first-time Indian entrepreneurs in the US has been in finding good advisors, mentors, and board members. However, this is a problem that’s slowly becoming less severe as VC teams, which were dominated largely by Americans, now have quite a few Indians as well and it’s visible across some of the marquee venture investors including SoftBank, Insight Partners, Sequoia Capital, and Andreessen Horowitz. Safety first, startups next Indian-origin entrepreneurs need far more patience and perseverance than their US counterparts to make even the brightest of the ideas fly since they haven’t grown up in that country. “The primary goal [for Indians in the US] is to get a job that pays more than what they can earn in India. Even for someone who wants to start [entrepreneurship] early, there’s not much to do till H1B gets converted into a green card,” says Arjun Rao, general partner at Speciale Invest, a VC firm. And that could take eight to 10 years. While Tredence’s Bhowmick got his green card in 2008, RecVue-founder Nair says that “the paperwork can be distracting”. Gupta of Benori Knowledge, however, sees it as a blessing in disguise. “In a foreign country, it can take that much time to create connections, network, and understand the market. Also, in the US the average age of a successful founder (barring exceptions) is late 30s to early 40s. In that sense, Indians are not too late,” he says. Gupta was among the early movers in the knowledge process outsourcing (KPO) space. He was the COO of analytics firm Evalueserve with previous stints at McKinsey. He is also one of the co-founders of Haryana’s Ashoka University, which focuses on liberal arts and science and Punjab’s tech- focused Plaksha University. The key aim of professionals migrating to the US is to have a better life. While they are open to taking risks early on, unlike their predecessors, they now have pathfinders in several Indian-origin CEOs and founders who can mentor them. That growing list includes Arvind Krishna, CEO, IBM; Satya Nadella, CEO, Microsoft; Sundar Pichai, CEO of Google parent Alphabet; and Shantanu Narayen, CEO, Adobe. When Jeff Bezos, Larry Page, or Mark Zuckerberg started their entrepreneurship journey, there were already precedents of Americans having created global companies. Besides, many of them thought of entrepreneurship while still in college, unlike immigrants who have to wait for paperwork to get the right legal status to start converting ideas into ventures. Indian-origin women entrepreneurs, as mentioned earlier, are a rare species in the US. But the likes of Sulatha Dwarakanath, founder and CEO, Kaya17, are among the exceptions. Having worked in the US for almost three decades in the medical diagnostics field in companies such as Bayer Diagnostics, Thermo Fisher Scientific, and Roche Diagnostics, she started off on her own in 2020. She has developed a saliva-based 15-minute rapid test for Covid-19. In Dwarakanath’s experience, VCs, which chase tech startups, are less inclined towards funding medical ventures as the ‘time to market’ can be long, pending approvals from the US Food and Drug Administration (FDA). Hence, she opted for the US Small Business Innovation Research (SBIR) grants, under which up to USD150,000 is given in funding to prove a concept. Dwarakanath had responded to request for proposal from the US Department of Defense to detect anthrax for which she got the SBIR grant. “We proved the concept and got USD1 million from the army to productise it,” says Dwarakanath, who is originally from Bengaluru and is now based in Connecticut. According to her, getting new ideas was not a challenge as much as “being a woman from South Asia and India”. She adds that “tech VCs don’t have the patience to wait for regulatory approvals and usually overlook an idea where the time to market might be more than six months or a year”. A question posed to her by one of the VC funds was about the market potential for her product once the pandemic blows over. Dwarakanath says Kaya17 has a clear path ahead of it. “It’s a platform to do disease testing and Covid-19 is only one of them,” she adds. Dwarakanath has a 12-people team, which will soon be expanded to 20 as she aims to ramp up monthly production to two-three million test kits. There are two types of Covid-19 tests — PCR and rapid antigen. While the latter is not as accurate as the former, Dwarakanath claims that Kaya17’s rapid-antigen test can match the accuracy of PCR. She expects to get an FDA approval for the product soon. The startup is also planning to come up with a combined test for influenza and Covid-19 as that could be the next challenge. “If you get the flu, you wouldn’t know if it’s Covid-19 or regular flu. Our test, at USD15, will tell you that. It is under emergency-use approval, pending FDA approvals. It takes about 15 minutes to complete the test,” says Dwarakanath. Given the size and scale of the American healthcare market, there is no dearth of opportunities. Abhinav Shashank, co-founder and CEO of Innovaccer, connects healthcare data to create unified patient records. Innovaccer was founded in 2014 in Silicon Valley. Gaurang Choksi, CEO and founder of Violet Health, aims to universalise identity-centered healthcare. Sunil Wadhwani, founder of W Health Ventures, also co-founded iGate Technologies and Mastech Digital. The VC firm wants to invest in newer care models, tech, and innovation. It sees Indians bringing cross-border learnings, which is part of W Health Ventures’ thesis. Another fund, California-based Neythri Futures Fund, with 200 women investors of Indian origin, wants to focus on helping South Asian and Indian women to start ventures. The fund was started in June 2021. Only 4.9% of its VC partners in the US are women and out of this, less than 7.5% are of South Asian or Indian origin. "The tools have changed, the ecosystem has changed, and more importantly, the understanding of data has changed. Now there’s a good chance that Indians will create scalable ventures." - Sivakumar Ramamurthy, co-founder, Pragya Ventures Playing it safe Most of these ventures are focused on enterprise customers rather than end consumers. Rao of Speciale Invest believes American founders have a lot of role models, making the journey easier for them. He observes that many Indians watch Hollywood movies, speak English, and want to mimic the American way. “We are automatic users of the same products that are made for America. That, in the reverse, is not true,” he points out. As for the tilt towards B2B ventures than B2C, Rao believes that it is easier for Indians in the US to understand the requirements of businesses as opposed to understanding the American culture. Also, Indians are strong in technical skills and a lot of engineers across global tech companies are Indians. However, sales and marketing skills have been slow to come by. For example, the Kellogg School of Management is among the best B- schools for brand management. Many Indians have also studied here. But very few join consumer companies such as Procter & Gamble, The Clorox Company, Brooks Brothers, or Kimberly-Clark and try to sell their products in the US. “If you have not grown up in this country for the first 25 years of your life, it’s harder to understand the American consumer,” says Bhowmick, adding that it is easier for second-generation Indian Americans. The bottom line While understanding local culture and nuances can take time, the new wave of tech disruptions promises to give immigrants a clean slate to start ventures. According to Bhowmick, while Web 1.0 and Web 2.0 were dominated by local Americans, immigrants now have a better chance of creating something at scale in some of the new domains such as Web 3.0, metaverse, and NFTs (non-fungible tokens). Since the large Indian diaspora in the US has been successful as professionals and founders, providing a bigger pool of mentors and guides to help their younger generations to start ventures will be easier now. Some of the early founders who took risks have shown the way. “For a foreigner to build business in India is much more complicated than it is for an Indian going to the US and starting a venture there,” says NLB Services’ Alug. Clearly, it’s no longer about where you are from, but what you bring to the table. And that, my friend, is called living the American dream 2.0! (Graphics by Manali Ghosh)