Q. The business climate in India has been changing since Prime Minister Narendra Modi came to power. How has that landscape in India changed?
Bhavin: I do see the changes in terms of policy, ambitions and goals by the Modi government in terms of wanting to digitalize the economy. I would say in the last few years, there has been a lot of policy reform, in particular at RBI (Reserve Bank of India) or the telecommunication space, or the payment space; essentially any government space which has some connection to IT.
The government’s imagination is quite aggressive—it permits entrepreneurs to leverage opportunities to both grow and create innovative businesses as well as have a real impact on the people in the country. In the entrepreneurship environment, I see a lot more startups getting formed in India. In fact, I was talking earlier about some of the challenges of hiring talent. Some of the people we hire had offers at Facebook or Google. It could also be that if one day one of our people leaves to create a startup, we don’t take it personally.
I am proud that we can develop a platform for potential entrepreneurs. There is a lot of funding, lots of capital flowing in, providing lots of opportunities to a lot of smart people. India, I would say in many ways, is the last big remaining digital economy from an internet perspective. China crossed the 40% internet penetration a couple of years ago and [has had a] crazy scale of growth in the last couple of years with companies like Alibaba. India has still less than 20% internet penetration and so to me it’s the last digital economy left of this size and will transform into one that has yet to see its potential play out and will give many entrepreneurs the opportunity to jump on that bandwagon.
Q. You touched upon the investing environment in India, all of these changes you’ve mentioned in that have occurred in the last few years, are really coming to steam now. I speak with investors here in the United States and they’re excited about India’s prospects but they’re hesitant about how robust the due diligence is. Is the oversight at the same level as in the United States, Japan or in any of the other first world countries?
Bhavin: I think you are probably right. I am hearing from my peers that deals are being done in a really short period of time. People are putting in money behind ideas. I am not saying that that is necessarily a bad thing, right now it’s more of an entrepreneur driven market rather than an investor driven one.
There is so much money chasing entrepreneurs right now, they can dictate terms and that is just the reality right now. There will be scenarios where somebody has multiple options and therefore the level of due diligence might be relatively lower, but it’s not necessarily a bad thing, per se. There are certainly cases where more sensibility should prevail, but this is venture capital money and it does come with more than just a modicum of risk. Certainly there will be a number of bets that don’t see expected returns.
Right now the way I see it, today, if you look at investing in some of the more developed markets, you won’t see the kind of returns you expect in India because the growth rate is significantly higher. People are willing to take higher risks to enjoy a potential ly higher reward. It’s a supply and demand thing. I can understand the skeptics and I’m sure there are a few businesses that don’t make the cut but that is part of the venture capital game.
Q. How much does luck factor into an entrepreneur’s success?
Bhavin: That’s a very good question. I do believe there is always a notion of luck and chance. There is two ways to look at it. I honestly can’t look back and say I have built nine different businesses, all successful, and we got lucky nine times. I can tell you we’re not that lucky. Luck does have relevance but I also think everybody has opportunities and luck in due course of time. You have to grab it, to make the effort. Chance will play a role in creating some of the opportunities, but an entrepreneur’s journey is such that he can attribute luck to some of his successes, though it is neither necessary nor sufficient to ultimately achieve success. It is more about the decisions you make which will have a bigger impact on your success.
Q. In hindsight, which business were you most concerned about till it became successful?
Bhavin: That’s the other interesting thing. That also what comes with being an entrepreneur, I was never actually concerned with the success of my business. Many times we’ll come up with an idea that may not work but we still feel like it will.
From a macro level, there hasn’t been a single time when we have been concerned or felt unsure of what was going to happen. In many ways, entrepreneurs have that attitude and things do eventually work out. If you don’t give up, you will eventually succeed. I can go so far as to say that, success in many cases was not the first incarnation or version of a concept that we came up with. In order to make things happen, we learned newer and newer things about that space.
Rahul Varshneya graduated from the Leavey School of Business at Santa Clara University with a degree in finance and works in the tech industry as a financial analyst. If you have feedback or have a topic you would like addressed please contact Rahul at firstname.lastname@example.org.