A look at the NRI entrepreneur who goes abroad to study and work, but finds a place for his homeland in his entrepreneurial dreams
It is an ever-increasing tribe – the ‘foreign-returned’ entrepreneur. Every year, many Indians whose studies or work had taken them away from their homeland return in the avatar of an entrepreneur.
DARE finds out what makes them come back, what the challenges have been, and how they try to overcome them.
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The India Specialist
The biggest reason for the ‘brain gain’ is the high level of economic activity in the country over the last decade. Many NRIs have found that their roots in the subcontinent landed them in a unique position in a world full of companies trying to get their foot in India.
“I am known as an Indian. The word ‘Indian’ is a permanent adjective for me here,” says Vikram Upadhyay, who has spent the last 11 years in Japan, after landing there to do master’s in computer science at the Tokyo University.
Having started off his career in software, Vikram is today associated with seven Indo-Japanese ventures, either as an investor or an advisor. He also plays an active role in various entrepreneurial forums such as TiE and the Indian Angel Network.
“When I came to Japan 11 years ago, my feeling was ‘I am here to learn something and someday I will pack my bags and go back’. Eventually, as I joined a company here and started getting success in my career, I got another feeling. I felt I could now contribute to India as well,” he says. Besides investing in young Indian startups, Vikram is actively engaged in bringing Japanese companies to India, either in an executive role or as an advisor.
“The India angle is always there in whatever I do now,” he says, “If, for example, someone comes and says, I want you to fix a broken bank in Iceland, I will say no, even if I had the expertise and there was a lot of money in it. There has to be an Indian angle.”
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| My logic was simple – the whole world is coming here. There is an acute shortage of leadership. If we can provide that leadership here, we can build a world-class company Raju Venkatraman |
Vikram’s sentiments are echoed by 42-year-old Sashi Reddi. Having gone to the US for further studies after getting B.Tech. from IIT Delhi, Sashi soon established EZPower Systems in the US in 1994, targeting the still early Internet market. He opened a development center in Delhi, hoping to tap the intellectual skill of India, but had to wind it up two years later as he could not find the requisite talent. He shipped everything back to the US.
Yet, “in the three companies that I started after that, there was an India angle,” he says. “What makes me stand out is that [I am] someone who has spent most of his student life in India and 20 years in the US, and I am able to bridge these two markets,” he adds.
No cakewalk
That said, starting and operating companies in India is no cakewalk for NRI entrepreneurs, as shown by the bitter experience of Sashi Reddi.
For Raju Venkatraman, joint MD and COO of BPO firm Firstsource, the India fixation was evident from his first job, at EDS. “In 1988, I was trying to get EDS to come to India. I knew there was a shortage of skills in the US, but it did not work out as the government was not ready to give what EDS wanted,” he remembers.
The ambition was fulfilled after Raju left EDS and started Vetri Systems, a US-based consulting and technology company in 1991. “In 1992, one of our publishing clients, LexisNexis, was having pricing issues with their operations in Vietnam. I felt that India could deliver the quality and had the basic infrastructure. We decided that the cost advantage was too good to be missed. In a way, it was a very high-risk venture for us. The customer did not give us the money to start India operations. If we had failed, I would have been wiped out,” he recounts. “So I told them to visit India and keep their minds open.”
Not everything went as planned, but things eventually worked out. “We landed for the first time in Bombay and I was very proud that I was able to get back something [to India]... However, the minute we landed, one of the bags of our guests went missing. At restaurants, they would constantly say, ‘no spice, no spice’, but thankfully, the business came through,” he says of the early days. “Even after starting up, there were many problems. Uptime was an issue’ we used to know every single line-man!” he adds.
However, the bigger challenge in the early 1990s, as Sashi found out, was in finding people with the right skills. In Raju’s words, “People in India at that time did not have the same concept of a customer. Here, people were happy standing in a line to get something. There were cultural issues with the management team. They tended to have an industrial relationship with the employees. It was a union mindset.”
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| The reason our Delhi venture did not work was because we were, and still are to some extent, poor at anticipating the market, coming up with features, understanding what the consumer wants, and delivering it. Sashi Reddi |
Raju’s words ring true for the others too, like Chandigarh-based entrepreneurs Puneet Vatsayan and his better half Anupama Arya. The couple founded the specialty research firm Mobera Systems in their hometown in 2003 after returning from the Silicon Valley to be with Puneet’s ailing mother.
The couple had never worked in India and started their ambitious ‘Bell Labs for hire’ with four employees, in a garage. “The most striking thing was that people were not proud of the work they were doing. Their parents would come and see them working and complain ‘mera kuka garage kam karda’. In the Valley, nobody would give a damn where you sit down. These people were doing work that people in the Valley would die to do and the salaries were almost as good. To us, it seemed that in India, who you worked for was more important than what work you did,” Puneet rues.
Another challenge for the couple was understanding employee behavior. “Here, till the age of 22, everyone treats you as a kidt’s only when you are in your first job that people start treating you as an adult. As a result, the sense of responsibility was missing in young people. It was considered okay to say something and do something else. We soon discovered that all our employees here knew everyone else’s salaries. In the US, this would never have happened. There was also a huge sense of divide between the employer and the employee. Besides all this, people also tended not to respect time, making the execution process longer than it would be in the US,” Puneet recalls.
Another big difference in the professional atmosphere between India and a market like the US is was the level of innovation. Sashi, who tried to get his software products developed out of Delhi for his maiden venture says his Indian team of 1994 was a failure at understanding the ‘product culture’.
“What we are very good at it is services,” he says, “We excel at building something if someone will come to us, give us all the specs, and tell us to build it. But we still have problems competing in the product space because in that market, there is no one to come and give you all the specs.”
“The reason our Delhi venture did not work was because we were, and still are to some extent, poor at anticipating the market, coming up with features, understanding what the consumer wants, and delivering it. We tried for two years, then gave up,” he says.
The Lessons
Interestingly, each of these entrepreneurs seem to have discovered a way around the problems they encountered. Perhaps the most interesting method of learning was the one adopted by Puneet and Anupama.
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| If someone comes and says, I want you to fix a broken bank in Iceland, I will say no, even if I had the expertise and there was a lot of money in it. There has to be an Indian angle Vikram Upadhyay |
“We decided to find out what really motivated our employees. So we went on a Bharat darshan,” he says. “Me and Anu hung out at different cities like Mumbai, Hyderabad, Chennai, and Gurgaon for two months, observing.”
Another strategy was to set an example. “We decided that we will build our company with a certain degree of values. We demonstrated that there are values: this is how we talk and this is how is walk. We routinely invited people who had left Mobera to come back and share their experiences with our employees. It works better when our employees hear of what they have and don’t have at Mobera from their peers. I don’t give ‘gyan’, because they think ‘he’s the owner, he will say that only’. Like in the Valley, we try to treat them as adults.”
Sashi, who came back to India in 2001, five years after shutting down his Delhi experiment, decided to stick to services, launching AppLabs, a specialist software testing company. Two and a half years later, he was ready to give the product business another try in India.
“We started FXlabs, a PC and console game company, from Hyderabad. This time, I flew down a very experienced CEO of a gaming company from Seattle, and had him stay back in Hyderabad for two years. The US team trained our team here and it worked,” he says, adding, “It would have worked in 1994 too, but it would have been difficult to find people from the US willing to spend months and years in India.”
And So it Goes On...
Interestingly, while the entrepreneurs are aware of the benefits of the ‘brain gain’ into the country, they rarely cite it as the primary motivation.
“In 2002, I moved back permanently to India,” says Raju of Firstsource. “My logic was simple – the whole world is coming here. There is an acute shortage of leadership. If we can provide that leadership here, we can build a world-class company. The sectors are all opening up, there’s growth everywhere and it’s all up for grabs.”
Sashi, who shifted to India six months ago, says, “After having lived in the US for 15 years, the move has not really made much of a difference to my lifestyle. Psychologically, it’s just a change in your permanent address.”
He dismisses the idea of the patriotic NRI entrepreneur. “I don’t believe in doing anything for the sake of altruism or a social reason. AppLabs created 1500 jobs in Hyderabad. For me, that is good enough. I think creating jobs is the biggest service you can do for society, and that cannot be done as a charity.”
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