It’s been 7 years since I wrote the first piece about moving back to India, and 5 years since the second piece after settling into the move. A few life changing events have happened since then. I sold Chaupaati to Future Group in India in 2010, we had our boy Kanav in 2012, I sold Chalo to OpenTable in the US in 2013, and subsequently moved from Powai to Berkeley in 2014 to integrate the acquisition as Shruti took on a fellowship at the Public Policy School of UC Berkeley.
As 2014 winds down, Shruti has finished her fellowship and I have concluded my gig at the acquiring company. Shruti remains committed to influencing policies towards cleaner energy and environment, and I remain committed to building world class tech companies out of India. Other than that, we are sufficiently confused about what we call home now and have decided to take 4 months off to travel the world and figure it out. Quoting my recent tweet – “India > Morocco > Spain > Chile > New Zealand > Australia > Hawaii > US (6 continents, 5 islands, 4 months, 3 people, 2 hemispheres, 1 life)”.
Encouragement and feedback from the Indian diaspora, friends, and colleagues have inspired me to write part three. Here is a short recap of my first two pieces to jog your memory. The first one contrasted life in the U.S. & India with regard to other people’s influence over our daily lives (opt-in v opt-out), relationships within the household (2C2 v 4C2), business environments (Sequoia v Banyan tree) and the diversity in social group (nationality v professional). The second one contrasted the two cultures with regard to socio-economic priorities (aspiration v experience), consumption patterns (survival v progress), impact of structure (chaos v order) and the experience with elements (man v nature). I am writing part three at a time when there is adequate clarity about the confusion before there is confusion about the clarity. So go ahead and have fun once more at my expense.
The “6-hour flight” test
Couple v Couple Dozen
An American colleague pointed out to me that a 6-hour flight from San Francisco to any place outside the U.S. would only take you as far as Mexico or Canada. Europe is an entire mainland and ocean away, and Asia Pacific needs you to cross the largest ocean of the world. Latin America and the Caribbean are out of bounds too. That got me thinking. .. Picking Delhi as the base, a 6-hour flight out would cover 26 countries, including China, Russia, 7 SAARC countries, 7 East Asian countries, 8 Middle Eastern countries and 2 African island countries. The list would be larger by another dozen countries if there were more non-stop flights or if they were an hour or two longer.
The contrast is starker if you consider the world’s population covered in the circle within the radius of a 6-hour flight. New Delhi would cover half the world’s population within a 6-hour flight radius while San Francisco would cover one-fifteenth. No wonder Americans seem a bit disconnected from the rest of the world.
“US is a time machine for India”… NOT
Same v Different
Between 2003-2006, major Sand Hill Road VCs set up shop in India to invest in tech startups. Their thesis was that what worked in the US could be replicated & adapted for the Indian market. A decade, a correction, and some long fund cycles later, the asset value looks promising on paper but the realized value has been a disappointment. In layman’s terms, the business of investing in Indian tech startups has not returned money after a decade. The depth of an IPO environment is a good yardstick of market maturity. You can count the number of Indian tech IPO’s on the fingers of one hand. In fact, no tech company that started after 2003 has gone IPO. As a sliver of hope, four companies that started in 2006 or later have raised money at a valuation over a billion dollars, and their best bet for an IPO is in financial markets abroad, as their company structures already reflect. It has not been all smooth sailing for them either as the Indian government flip-flops between leaving you alone and trying to come after you.
After being part of consumer businesses in both markets with millions of users in each, I have learnt a few things. First, the economics in India work in favor of solving problems through people rather than machines, while the opposite is true in the U.S. Second, the Indian consumer’s tolerance for pain to avoid spending is in sharp contrast to the US consumer’s propensity to pay for control & convenience. Third, for consumer tech businesses at scale, revenues per customer are a fifth in India as a direct result of purchasing power parity but unit costs are only half due to smaller or no gap in real estate, tech talent, or fuel costs. For these reasons, India will not evolve like the U.S. for any foreseeable period of time.
The Indian entrepreneur’s dilemma
Returns v Impact
When my Indian company was bought by the leading group in the $400B retail market of India, their market cap was about a billion dollars. A few years later, when my U.S. company was bought by the leader in a $50B niche in the hospitality market of US, their market cap was well over a billion dollars but with far lesser volatility. Despite being similar sized acquisitions, my Indian company was a full-fledged business with profitability and scale at the time of exit, while my U.S. company exited thrice as fast after building a product that had yet to be launched. An IPO environment in a larger market with predictable policies seems to outweigh the depth of latent market opportunity.
Immigrants are cursed for life because of their inability to reconcile their life in the place where they grew up and have parents with the new life created in the comforts of the developed world where they made money and had children. Indian entrepreneurs get a double whammy for trying to reconcile the gratification of solving the more fundamental problems of India with the lucrativeness of solving the more incremental problems of the developed world. I first tried to build a business for the U.S. market while being in India and right out of college 15 years ago. We have come a long way since then in our ability to succeed with that model, my last company being a validation of that, and I would bet that the next 15 years will see some pleasant surprises.
The Formative Years
Entitlement v Perspective
As we think of our next chapter in life, we find our perspective being driven by the fact that we are parents. We must deliberate the choice of where Kanav’s formative years should be.
Neuroscience shows that life experiences in the past continuously result in formation of brain patterns that determine how future events occur to us, resulting in the thought processes that determine our actions and decisions. Patterns formed between the ages of 3 and 16 (roughly) become the OS of our brain. This OS is stuck with us for life, and does not really alter unless the computer crashes due to a major life event and you need a recovery disk boot-up. Patterns due to experiences in rest of adult life are only apps on top of the OS and do not alter our core personality. 90% of critical brain development of a human happens by the age of 5. As a parent now, I need to be deliberate about how my child spends the formative years of life, especially 3 to 5.
Another daunting fact is that the life expectancy of an American is nearly 79 years, 20% more than an Indian. It is no surprise that my friends in U.S. look and feel younger than friends of the same age in India. At the same time, due to experiences with lack of structure and diverse identities while growing up, my Indian friends are far more adaptive to multiple divergent perspectives than my American friends are.
On the one hand, you obviously want a long and healthy life for your children. On the other hand, an upbringing in India, balanced with access to diverse perspectives globally, would make them more grounded. When they enter adulthood they might be more thankful for the privileges of the developed world and have more empathy for points of view of the rest.
Shruti works in a field where policies are made in the U.S. and applied to India. I work in a field where products are made in India and applied to the U.S. Kanav is at an age where our choice of what we do next and where we do it from would shape the rest of his life in a meaningful way.
With great choice comes great confusion. Shruti, Kanav and I are about to begin a once-in-a-lifetime journey together to figure all this out. The travel involves a fortnight in US and India each, but most of it in neutral third countries with just the three of us. No bias of the place we are in, positive or negative. It is time to fall in love all over again, with each other and with the planet. The serendipitous timing of our career breaks and the liability-free age of our son gives us the opportunity to invest in some soul-searching while globe-trotting. The answer to what’s next for each of us will present itself. I feel like Truman Burbank.