India is Where the Expatreneurs Are

Jean Michel Jasserand
Age: 49
Founder: Toscano Restaurant
From: Nice, south of France
Survival Tip: Learn to love the city you are in, learn to love the people around

As the weather in Bangalore turned from pleasant to hot in March, the kitchen in Toscano, an Italian restaurant at UB City was a hub of activity. Abdul (goes by one name), the kitchen in-charge was crying out the orders that came in, festooning the frame at the head of the table with order sheets. The staff, in white, was busy chopping vegetables, stirring food on pans, arranging them on plates and delivering the food to the tables. Suddenly, in came a foreigner, dressed in a black shirt and jeans. “It’s a direct,” he said in a French accent, handing Abdul an order sheet. His eyes quickly scanned the kitchen. Everything seemed to be in order, his face relaxed and he walked out as quietly as he came in.

Five star hotels have long employed expat chefs to render authenticity to their cuisine. After  the economic liberalisation of the ’90s, expats in the workplace increased. Multinational firms brought expats with them. Airlines and hospitality sectors, hired them when they couldn’t find enough skilled people locally.

But, the French man who walked into the Italian kitchen is different. Jean Michel Jasserand is not just a chef at Toscano. He owns it. He also runs a cafe two shops down, and another Toscano branch in Whitefield, 15 kilometers away. Jasserand represents a small breed of entrepreneurs, setting up business — technology, consulting, design, green energy, restaurants, garments — in a country where they have no roots, and where it’s tougher to do business compared to their own homelands.

Sudhir Sethi, CMD, IDG Ventures, a venture capital firm, says he has interacted with at least 15 companies started by expats, and he expects to see more. Part of the reason is the economic growth in India, and the slow growth, even stagnation, in the West. In metrics such as spending power and technology penetration, India is at a stage that US and Europe were several years ago, offering a test-bed to see if the products and services that did well in the West will click here. This was evident to those expats who came to the country as employees of MNCs. “Some of them saw the opportunity here and jumped in”, says Priya Chetty Rajagpoal, vice president of Stanton Chase, an executive search firm.

India is the World
What distinguished the few that took the call is a quality that combines entrepreneurial streak with a global soul raring to explore the world.

Jasserand says he always wanted to travel to different countries, and when he was 18 someone told him that for someone who is not born rich, the easiest way to do that is to become a chef. It turned out to be true, as his job took him to London, Dubai, Korea and eventually landed him in India, at Leela Palace Hotel in Bangalore. He left Leela to take up a contract from Infosys (which still holds), and then the restaurants. A note on the founder of D.Light Designs, another start-up founded by an expat, reads: Sam Goldman has lived in Cameroon, Mauritania, Pakistan, Peru, India, Rwanda, Canada and the USA.

“It’s a question of ideas and people coming together, and that happened to me in India”, says Valerie Rozycki from California who came to India to work in mCheck, a mobile payments company based in Bangalore, and two years later went on to found a company called Zipdial. In a more logical world, that should have happened in Silicon Valley. She went to Stanford University, and then worked in eBay, before the desire to do something more challenging caught up with her, and she moved to Bangalore.

Valerie Rozycki
Founder & CEO: ZipDial
From: Modesto, California
Survival Tip: Don’t underestimate costs.  The idea that starting up in India is so much less costly than developed markets can be a myth in some cases

Mark Vollenweider was working as a consultant  at McKinsey’s Delhi office when he met Alok Agarwal, an IBM veteran who was thinking of starting a legal process outsourcing firm. Their paths had crossed because of their children, who attended the same school. Their ideas and ambitions matched, and soon their venture eValueserve, a custom research and knowledge process outsourcing company in India was up and running.

The Question of Value
While personalities and ambitions fit well in a market with many untapped opportunities and potential for huge growth, does it help being an expat here? As an entrepreneur what does an expat bring that a native doesn’t?

In some cases — such as restaurants, the value they bring might seem obvious. Part of the reason why Toscano is well known in Bangalore is because of Jasserand and that is fair enough.

In some cases, expats bring in skill sets that might not be readily available in India. For example, the network in the customer market. Vollenweider spent about 10 months in India after he started eValueserve, and then he realised that to add value to the business he has to move closer to the customers and to the market he understood better. He moved to Austria. (Similarly, Agarwal moved to California.)

The real value addition happens at a much earlier stage. Ashish Gupta of Helion Ventures says often when people with no roots in India come here, they come with an open mind. Foreigners come with no preconceptions. And that helps.

Take missed calls, for example. It’s such a widespread phenomenon in India that few here get surprised, and many don’t even give a thought to it. But Rozycki couldn’t get over the idea that people used missed calls for communication, and came up with a business model that is built around making calls at no charge. It counts KFC, Pepsi, Videocon and Aventis among its customers. It gets about a million missed calls a day — for cricket scores, to provide feed back and to vote.

It’s not that their instincts will always turn right. But they try to bring new solutions to old problems, without dismissing the issue as unsolvable.

Perhaps the most talked about expat entrepreneur is Sean Blagsvedt (“Yes, being a foriegner gives you good press,” he says) who came to India to set up Microsoft Research Centre in 2004, and two years later went on to found babajob.com, a job portal for unorganised sector, maids, cooks and drivers.

Sean Blagsvedt
Age: 35
CEO at Babajob.com
From the Bay Area of California, USA
Survival Tip: Live close to your office. A growing Indian middle class spells horrible traffic.
(Photo by Gireesh GV for Forbes India)

When Blagsvedt looked around, he found that while his colleagues at Microsoft had access to support services such as recruitment agencies and online portals, the poor primarily depended on their rather small network of friends, relatives and their employers to find a job — making that market inefficient. Babajob hoped to bring in some efficiency through the Internet. Setting up was easy, scaling up was not. Direct access to the Internet was a big issue. Now, he is hoping to use the mobile penetration and call centres to bridge the gap. Even now, it’s still not clear if it can scale up.

Should I Stay or Should I Go?
But, the bigger question is not really of finding the right solution to the problems. It’s about having the social and professional networks to hire the best people, and removing a few hurdles along the path.

Success in entrepreneurship is a function of attitude, knowledge and relationships, says Gupta. In some sectors such as real estate relationships — the network of bureucrats, local connections — matter more than anything else, and expats would find themselves at a disadvantage.

In some others, a technology firm serving the US market, local relationships don’t matter much, but such companies tend to be headquartered in the US. Many others come somewhere in between — where relationship is not the main driver, but it does matter, says Gupta.

One way out is to hire local managers. Mandeep Singh, managing director of D.Light, the company founded by Sam Goldman, had worked in companies such as Amul, Kodak and Colgate, and in all of these he was into expanding the brands in rural areas. The experience complemented what Sam Goldman brought to the table — technology and design, Singh says.

An expat hoping to take on the Indian market by himself, would have a tough time convincing financiers. Sudhir Sethi of IDG Ventures says to succeed here you a need to build a network to hire leaders, and that involves a learning process. It takes time — one to three years — and time is money. “VCs are not in the business of training entrepreneurs,” he says.

And then, there is a question of the number of years they would stay put. Having no roots, it’s easier to shift base. For some who decide to stay longer, there is usually a stronger tie other than business. “They tend to have Indian spouses, in many cases,” says Mohanjit Jolly, of DFJ, a venture capital firm. Blagsvedt is married to Archana Prasad, a designer and an artist  who used to work as a design researcher at Microsoft. John Bissell, founder of Fab India, was married to Bimla Nanda.

Without such ties to bind them to India, they tend to move on. Sam Goldman recently shifted his base to Hong Kong to be closer to his suppliers. John Howard, who worked in McKinsey, attracted significant media attention when he founded Duron Energy. He is no longer with the firm. Rozycki says her attention is now on building Zipdial to a scale, make an exit, and start another venture. Once you have done this, you want to do it again, she says.

When Jasserand started his restaurant he was pushing 50, he had a small kid, and he thought it was high time for him to settle down. He briefly considered Dubai, but found Bangalore as good as any other place. Entrepreneurship, for him, was a way to stay put in a place. For many others, it’s a way to move around.