Indian Startup Market Reality Check for NRI & foreign founders.


I just concluded a 7-month journey in India, my longest stay since leaving the country 18 years ago. The purpose was to work closely with the team and grow my startup, aiming to find the right partner on the ground and expand the core team. Despite my initial belief that I understood India well, this visit proved disappointing, revealing significant differences from 18 years ago. It led to a reality check and shattered many emotional beliefs, ultimately resulting in winding down the revenue-making unit of my startup.

As always, I will share my experience in two contexts: founder and investor.

Starting with the founder’s (non-native) perspective, building a startup/business targeting the Indian market demands extra caution. The focus on market size often overlooks purchasing capacity, paying intention, and, importantly, consumer attitudes. Indian consumers have adopted a freebie attitude, sticking with businesses offering freebies and heavy discounts. Building a loyal customer base is challenging in the Indian market.

The prevalent issues in the Indian business world contribute significantly to this situation. Consumers anticipate being deceived, and to a great extent, that expectation is met. Lies, fraud, bad commitments, and poor service are at the core of business in India. Consumers must make room for some degree of lies and fraud in every deal or transaction. Finding a business running with strong ethics and honesty is extremely challenging. Daily life is filled with instances like receiving an OEM laptop charger without a power cord or a repaired laptop missing part of the RAM or getting things delivered completely different from what’s being ordered. Consumers have grown accustomed to taking advantage of businesses whenever the opportunity arises, and startups become victims in their race to attract consumers with offers.

Making money through software services in India is particularly difficult. The prevailing attitude towards software services and products is dismissive, thinking that software is built effortlessly, like magic in every corner of India, and is not worth paying for. Many believe every IT startup makes billions of dollars just by selling email ids and phone numbers. For most Indian consumers, privacy is limited to email ids and phone numbers. They are indifferent to being tracked and traced by big players 24×7 but inquire about how a startup will protect their email ids and phone numbers. While startup greeting messages may seem like spam, they are fine with tons of promotional messages from big players and their partners.

To build and run a successful startup, finding someone trustworthy who aligns with Indian business culture is essential. Avoid passing on business and consumer ethics, as the local executor may struggle to follow them in that market. They need a free hand to execute on the ground in their style, even if it doesn’t align with the founder’s ethics criteria. This localization of execution requires adaptation by the entire founding team, focussing more on the vision and growth KPI while overlooking execution details to a great extent.

In my experience, finding such a strong and trustworthy executor is challenging for most non-native founders. Unfortunately, finding honest and genuine people in India, especially in the business domain, is like finding a needle in a haystack. Doing business with ethics is challenging in that market, filled with lies, false promises, over-commitment, and under-delivery. You will Constantly needs to deal with vendors, contractors, and employees of such attitudes. Beware of individuals like @NI & @MT, who never run out of excuses and make false promises & fake stories, attempting to spoil the work culture and extract money in every possible way. One such hire can ruin a startup completely.

Enforcing processes and procedures with young Indians is challenging, with many innovative excuses for not following them. Incentive and variable pay often don’t work; everyone works for the fixed component with zero responsibilities towards targets and deliverables. The majority of staff needs spoon-feeding, as they don’t use their minds. The Western management style and a flat structure are complete failures, leading to unproductive time spent addressing complaints.

A special piece of advice to NRI founders is not to get emotional and to stringently evaluate things, stronger than in any other market. India has changed since you left, and for many there, you are viewed as an emotional fool, Non-Returning Indian & an opportunity to be squeezed. The first necessity is finding a smart, strong, completely reliable native person on the ground, preferably someone you know well enough to trust. They will be your general to execute everything; success is unlikely without such a strong, honest, and reliable person, even if you are a team of founders. Additionally, starting a venture is now easy, but shutting down is more difficult; be prepared to book closing losses if necessary. The market may not honor agreements and services rendered; they may default on payment.

Recently, there was a great debate on social media about working hours. Respected N. R. Narayana Murthy, sir advised a young Indian to work for 70 hours a week, and I respect his opinion. In response, many expressed their opinions on matters, like work-life balance, working for 70 hrs at 40 hrs pay, etc. Those are very valid in order to achieve greater social balance. In my opinion, if every Indian puts in 40 productive hours, that is enough to achieve success at work and at home. Keep in mind, 40 real productive hours exclude chai time, sutta time, long lunchtime, snacks time, tiffin time, gossip time, and many other timepass activities common in Indian corporates. Those are in everyone’s control, and everyone can figure out how to put in eight productive hours per day. I strongly believe this will achieve Murthy sir’s dream of a successful India, bringing work-life balance and resulting in a happy and healthy society.

This is not intended to hurt anyone’s sentiments; I am just trying to share my experience. People are free to comment; I would love to read others’ experiences.

You May Also Like

Leave a Reply

Your email address will not be published. Required fields are marked *