Straddling two worlds
US-India. Silicon Valley-Bangalore. New economy-old economy. Cutting-edge technology-basic necessities. High-speed internet-cheap mobile phones. Self actualization-food&shelter. Nariman Point-Dharavi. Dream-reality. Future-present.
My work and life straddle two worlds. I work for a US VC called Bessemer Venture Partners, looking to invest in
For more good than bad, both worlds are irrevocably intertwined. And not just in my life. Technology advances have enabled prosperous, high-wage economies to build/buy code, medicines, auto parts, chemicals, customer service and operations support from poorer, low-wage economies. Seamless capital flows fund those Indian companies that deliver these products/services and in-turn boost the purchasing power of their direct and indirect employees. This in-turn drives consumer demand, enhances quality-of-life and stimulates a new set of companies/products/services to cater to this demand. These effects are accelerated by global media exposure, favorable demographics, changing aspirations & mindsets, supportive government policy and cheap financing. As a result, we see tremendous change and growth all around us, right from the way we shop to what kinds of jobs are available for the next generation.
This challenge is significant and cannot be understated. Here are some real questions that get thrown up, as we go after this opportunity:
- Is PC/internet penetration about to take off the way mobile phones have?
- Once 300 million Indians have cell phones, what else (other than communication) will they use it for?
- There have been half-a-dozen occasions over the last 20 years when the mood in
was similarly optimistic. How is this time different? India
- How much risk do poor infrastructure and coalition politics pose to growth?
- So many techies, but so few technology innovations! Will we remain a technology-services country or will products finally reach scale? When will
Bangalorebecome Silicon Valley?
- Is the Indian consumer getting any less price-sensitive? Will low-cost, low-price be the only strategy that will scale in
- How large is this middle-class really? Is it really 300 million? How to segment it further?
India5 years behind ? Should I simply look at what’s taking off in China Chinatoday and bet on similar things in ? India
I don’t know the answers to any of these questions. I wish I did. The most important step is to know that these challenges exist and acknowledge that there are no easy or readymade answers. This knowledge (or, awareness of ignorance really) should allow each investment and business decision to be viewed specific to the Indian context. More often than not, Indian businesses will look substantially different from their counterparts in the
Let me end with one of these questions we faced at
Our approach – a broader investment focus in
Naturally, our unique structure (we have only one Limited Partner, who had been with us since 1911) gave us the flexibility to make this decision!