Speaker 1: Okay
Speaker 1: hello, you're listening to Cope in time. A podcast series
Speaker 1: on markets and economies from DBS group research. I'm Tamra
Speaker 1: Beck chief economist, welcome to our 68th episode, the first
Speaker 1: one of 2022.
Speaker 1: It is tempting to begin the year with global macro
Speaker 1: and trust me there will be plenty of that in
Speaker 1: the forthcoming episodes.
Speaker 1: But today's episode takes its cue from a couple of
Speaker 1: riveting conversations I've had with Sarah jane in the past year.
Speaker 1: Sarah is the founder of connects SEO a provider of
Speaker 1: human capital services to organizations across Asia with a key
Speaker 1: focus on the startup system.
Speaker 1: From each of the conversations that I had with sort
Speaker 1: of over lunch in the last year or so. I've
Speaker 1: always come away with the feeling that something really interesting
Speaker 1: is going on in one particular area of Sarah's focus
Speaker 1: which is India
Speaker 1: the country scale entrepreneurial tradition, problem solving culture and just
Speaker 1: the current global juncture of where markets and geopolitics stand.
Speaker 1: Make the startup proposition there a very compelling one.
Speaker 1: Sarah jane is a chartered accountant
Speaker 1: And an alumnus of I am Ahmedabad and Booth School
Speaker 1: of Business University of Chicago before setting up connections back
Speaker 1: in 2017. Sarah spent 12 years at Deutsche Bank where
Speaker 1: his last role was chief operating officer for a pack
Speaker 1: corporate finance Sarah, welcome to cope in time.
Speaker 2: Thank you very much anymore. It's a pleasure to be here.
Speaker 2: Thank you so much for inviting me
Speaker 1: been looking forward to this. Let's begin by talking about
Speaker 1: the next show,
Speaker 1: Tell us a bit more about what it does and
Speaker 1: why did you set it up?
Speaker 2: So um as you mentioned earlier can excuse fundamentally an
Speaker 2: HR consulting firm with a focus on recruiting and other
Speaker 2: management consulting activities related to human capital.
Speaker 2: Um I set it up in 2017 to help plug
Speaker 2: gaps in how various human capital-related matters were being attended,
Speaker 2: to both by large organizations, as well as specifically the
Speaker 2: startup ecosystem, which back in the day was already starting
Speaker 2: to
Speaker 2: starting to grow quite quite rapidly.
Speaker 2: Um from from a personal perspective, I've had the good
Speaker 2: fortune to, to live and work in a number of
Speaker 2: different geographies, the continent, europe, the America Southeast Asia and India.
Speaker 2: And after a corporate career of 15, 16 years, I
Speaker 2: really wanted to see if I could synthesize some of
Speaker 2: the experiences that I've had,
Speaker 2: bring them together and drawn them to help at the
Speaker 2: executives in the large companies, all founders of the XO
Speaker 2: CXS in the startup ecosystem to have them solve some
Speaker 2: of the issues that they were looking for, that that
Speaker 2: they were addressing.
Speaker 2: That was the main reason why I actually said connect
Speaker 2: you up about almost five years ago
Speaker 1: and how has it gone so far? How has it
Speaker 1: been running a business based out of Singapore, but with
Speaker 1: a lens that goes to South Asia and perhaps even beyond.
Speaker 2: Yeah, no, you're right about beyond because our gambit has grown,
Speaker 2: We now cover stuff across ASIA. So starting with clients
Speaker 2: in the Middle East through South Asia, Southeast Asia and
Speaker 2: Hong kong
Speaker 2: um
Speaker 2: Being based in Singapore and running a regional business while
Speaker 2: Singapore is probably the best place to be based in
Speaker 2: for a variety of infrastructural reasons.
Speaker 2: Um and then through covid, like many other, many other organizations,
Speaker 2: we've learned to adapt, we've learned to use technology, we've
Speaker 2: learned to uh to build S. O. Ps internally.
Speaker 2: The key thing that both me and my very high
Speaker 2: quality management team have focused on is to ensure that
Speaker 2: execution doesn't miss a beat. Um And so far I'd
Speaker 2: like to, I'd like to believe have been fairly successful
Speaker 2: in that like I said, by using, by using technology
Speaker 2: to support our business efforts,
Speaker 1: but very soon will you start traveling vigorously again
Speaker 2: for sure. 100%. I have already dipped my tour. I've
Speaker 2: been fortunate to be able to make a couple of
Speaker 2: trips recently to the bay Area where many of our
Speaker 2: investor clients are. Um and also to, to India. Um and,
Speaker 2: and yes, it's it's quite clear that although the future
Speaker 2: of work,
Speaker 2: the the nature of the future of work remains uncertain
Speaker 2: and of course there are evangelists on both sides. The
Speaker 2: fact is that people have started engaging again personally, which
Speaker 2: is definitely critical for the world as it emerges from
Speaker 2: the pandemic.
Speaker 1: So sir, I want to talk to you about the
Speaker 1: indian ecosystem momentarily. But since you were talking about the
Speaker 1: future of work, let me pick your brain a little bit.
Speaker 1: So in the process of setting up companies, whether it
Speaker 1: is in Singapore or in South Asia or elsewhere
Speaker 1: are
Speaker 1: employers trying to become more flexible and, and how has
Speaker 1: that experience been during these two years of covid and
Speaker 1: by flexible, I mean, you know, work from home sort
Speaker 1: of thing.
Speaker 2: Um, I think it remains an evolving situation. I think
Speaker 2: to a large extent the world,
Speaker 2: the certain parts of the world declared victory once Delta
Speaker 2: started dying down. Uh, and then on the economic front
Speaker 2: came up,
Speaker 2: I think with omicron, the acceptance that
Speaker 2: hybrid is here to stay for a while is starting
Speaker 2: to set in a little bit deeper.
Speaker 2: There are people still hesitating to call
Speaker 2: the complete end of full time work, but at a
Speaker 2: more kind of grassroots or at a more practical level. Um,
Speaker 2: there was definitely a move towards officers opening full time
Speaker 2: and the expectation that employees would work full time over,
Speaker 2: let's say late Q two, early, early Q three as
Speaker 2: the worst of Delta seemed to be behind us in
Speaker 2: the region in most countries. But now I think it's, it's,
Speaker 2: it's fair to say that that's for me in the
Speaker 2: back seat.
Speaker 2: Um,
Speaker 2: despite the acceptance that omicron may not be as lethal
Speaker 2: as Delta, I think employers recognize that it's perhaps too
Speaker 2: early for full time return to work and we're definitely
Speaker 2: seeing a move back to Italy's hybrid. And in the
Speaker 2: case of especially MNCS to return to work from home
Speaker 2: to some extent.
Speaker 1: Okay, so let me one more follow up question Sarah,
Speaker 1: the idea of remote work is not new. My cousin
Speaker 1: in san Jose way back in the early 19 nineties,
Speaker 1: worked for global software development team where some of them
Speaker 1: were in India, somewhere in East Asia, somewhere in the
Speaker 1: US across time zones,
Speaker 1: producing a product that then IBM
Speaker 1: marketed. How are
Speaker 1: How are these things or these recent developments any different
Speaker 1: from what my cousin used to do 30 years ago?
Speaker 2: I think your cousin was then the exception
Speaker 2: and it's now becoming increasingly the rule. Um, and the
Speaker 2: thing is what, what, what we're seeing, especially in the
Speaker 2: developing countries in the region,
Speaker 2: is that changing the nature of work isn't just about
Speaker 2: putting boundaries around how and where you do your work from.
Speaker 2: It also means changes in how you live.
Speaker 2: It means changes in your domestic infrastructure. It means sometimes
Speaker 2: changes in the social dynamics within a family's home.
Speaker 2: Um, and in parts of the world like Asia, where
Speaker 2: there are often multigenerational families living together or there are
Speaker 2: certain preconceived notions about gender rules, etcetera. Uh, there are
Speaker 2: second order 3rd and 3rd order impacts that I think
Speaker 2: are still being, uh,
Speaker 2: are still being fleshed out
Speaker 2: by societies at large.
Speaker 2: It's not
Speaker 2: work from home is not necessarily for all parts of society,
Speaker 2: the Holy Grail or at least not as consistently or
Speaker 2: in as wide ranging a manager Manager, wide ranging a
Speaker 2: manner here in asIA as it might be in certain
Speaker 2: developed countries.
Speaker 1: Makes sense. Makes sense.
Speaker 2: Alright, so much deeper. Happy to come back for episode
Speaker 2: 73 to discuss that.
Speaker 1: Absolutely. Okay, let's talk about the middle of our conversation.
Speaker 1: So let's get into India, you've spent quite a bit
Speaker 1: of time in the last few years working across various
Speaker 1: segments of the indian talent pool.
Speaker 1: Um so why don't you get us going by giving
Speaker 1: us a little bit of idea about the supply of talent,
Speaker 1: the demand for talent idiosyncrasies around India, the depth of
Speaker 1: skill that everybody talks about. So
Speaker 1: give us get us going with indian town pool.
Speaker 2: The indian talent pool
Speaker 2: as a well known fact is vast. That's the only
Speaker 2: word for it's absolutely vast. Um
Speaker 2: it's vast, it's wide
Speaker 2: and I think the most interesting aspect of it
Speaker 2: is that it keeps auto refreshing.
Speaker 2: Um
Speaker 2: it's very flexible every few years. People naturally upscale or
Speaker 2: re skill themselves to make themselves relevant for what is
Speaker 2: becoming an extremely dynamic, extremely dynamic, dynamic working environment.
Speaker 2: I mean tech is probably a great example of that
Speaker 2: to just a handful of years ago, the bulk of
Speaker 2: the demand in India was for I. T. Services companies,
Speaker 2: the old major's right, The companies like Tcs were proposed
Speaker 2: that the mxcl etcetera on which the entire backbone of
Speaker 2: the indian technology ecosystem has been built
Speaker 2: and for which the country is going to be eternally grateful.
Speaker 2: But if you look at where what's happening nowadays, the
Speaker 2: technologies that the new startups are looking for um and
Speaker 2: the kind of skills that they're looking for have evolved
Speaker 2: because because there is clearly a move from a high
Speaker 2: degree of demand for service based skills to product company
Speaker 2: based skills and and things like that are a pretty
Speaker 2: inexorable change and represent an upscaling of the overall workforce
Speaker 2: which perhaps for the decade or so before, that
Speaker 2: hadn't happened. And as kind of conclusive manner as it
Speaker 2: has now. Um
Speaker 2: in terms of in terms of demand, um I think
Speaker 2: you'll find that
Speaker 2: almost any statistic you look at with respect to the
Speaker 2: startup ecosystem in particular because that's I know what you
Speaker 2: want to focus on today. The number of jobs being
Speaker 2: created is absolutely massive.
Speaker 2: Uh If you if you only look at the startups
Speaker 2: that are registered or within the ambit of government registration,
Speaker 2: uh there were a few 100,000, a couple of 100,000
Speaker 2: jobs created last year. The true number. If you talked
Speaker 2: to any of the founders uh and after you clean
Speaker 2: out the Raiders probably 4 to 5 times that
Speaker 2: just just in the last year.
Speaker 2: And then if you look at the related uh Ancillary
Speaker 2: jobs created, You multiply that by another 2 to 3 times.
Speaker 2: So you're potentially looking at perhaps as much as a
Speaker 2: job creation of one million just in the last 12
Speaker 2: months by the startup ecosystem. Um uh
Speaker 2: Again by government estimates the number of white collar jobs
Speaker 2: expected to be created in the next year is about
Speaker 2: again between 150-200,000. And again this is only by startups
Speaker 2: that are within the ambit of the government, there would
Speaker 2: be a whole bunch of other companies that may not
Speaker 2: be there.
Speaker 2: So in terms of both supply and demand, I think
Speaker 2: we're at a historic juncture um there will always be
Speaker 2: a degree of distortion. Sometimes the supplies too much, sometimes
Speaker 2: the demand is too much. But in terms of this
Speaker 2: becoming an ecosystem that is driving economic growth in India
Speaker 2: this definitely is um is
Speaker 2: the most important
Speaker 2: growth factor right now.
Speaker 1: Sarah Help me confirm or dispel this notion that I have.
Speaker 1: My notion is that in the last 20 years the
Speaker 1: orientation of the tech service industry in India has
Speaker 1: been transformed from one that was primarily export oriented. So
Speaker 1: the T. C. S. S that you were talking about,
Speaker 1: it was providing I. T. Services to various global MNCs
Speaker 1: and their investment was also about indians working for an
Speaker 1: MNC to provide services to their customers in the US
Speaker 1: europe wherever. And my notion is that it's changing as
Speaker 1: we speak and some of the businesses that you're working with,
Speaker 1: they're actually looking at providing services to indian customers earning
Speaker 1: revenue in India, is that an accurate notion?
Speaker 2: It most certainly is. Um and I think the second
Speaker 2: order impact of that also is that the relative attraction
Speaker 2: of working for the domestic sector as the startup ecosystem
Speaker 2: becomes more and more mature, it becomes more and more
Speaker 2: pervasive is becoming stronger and stronger. Um
Speaker 2: uh
Speaker 2: you know, the the traditional concepts of job security et cetera,
Speaker 2: jobs for life, which mattered so much to people coming to,
Speaker 2: to to fresh limited employees coming out of uh out
Speaker 2: of engineering colleges for example, um that's not necessarily as
Speaker 2: much
Speaker 2: of a critical factor anymore because the opportunities in the
Speaker 2: startup ecosystem like you said, where their various servicing the
Speaker 2: domestic ecosystem
Speaker 2: are absolutely humongous. Now, also, I guess with the world
Speaker 2: becoming a more close place with many, many countries uh
Speaker 2: forcing or rather encouraging their businesses to hire locally and
Speaker 2: discouraging offshoring of jobs that in a in a way
Speaker 2: has also supported
Speaker 2: the movement of tech talent towards the, towards the startup ecosystem.
Speaker 1: Do you see a lot because you said earlier that,
Speaker 1: you know, you have been to the area as one
Speaker 1: of your first travel destinations for work. So there is
Speaker 1: a lot of
Speaker 1: indian entrepreneurs who have succeeded in the west and now
Speaker 1: they're bringing their capital or know how back to India?
Speaker 2: Um yes. Uh there there there is certainly a lot
Speaker 2: of that happening in in multiple ways. Uh there are
Speaker 2: a bunch of entrepreneurs whose businesses are fundamentally maybe us
Speaker 2: oriented or europe oriented and are therefore not that well
Speaker 2: known in India
Speaker 2: would have already set up large tax centers or R
Speaker 2: and D centers in India
Speaker 2: because these companies are not household names there perhaps not
Speaker 2: as well known in India or or they work in
Speaker 2: fields which are perhaps not very large and not that
Speaker 2: cologne India. So there's already a lot of that happening.
Speaker 2: But but what we've also seen and what I've personally
Speaker 2: seen talking to a lot of senior founders and and
Speaker 2: and C. X. O. S in the west, especially in
Speaker 2: the tech enabled ecosystem is that
Speaker 2: Covid has perhaps got many of them to start thinking
Speaker 2: about some of the longer term life priorities. And although
Speaker 2: obviously Covid was a terrible, terrible time for people globally.
Speaker 2: And the issues in India are well documented during, during
Speaker 2: the delta way last year. Um there's an increasing shift
Speaker 2: in mindset
Speaker 2: of people who thought they were going to be living
Speaker 2: abroad overseas. And I want to come back to be
Speaker 2: closer to family, be closer to home. And also, frankly
Speaker 2: over the last 2.5, 3 years, just before Covid started
Speaker 2: and through Covid because the indian ecosystem has been so vibrant.
Speaker 2: I mean $25 billion on average of investment coming in
Speaker 2: every year,
Speaker 2: which means that a lot of these guys say that,
Speaker 2: you know, we can build careers in India and be
Speaker 2: close to our,
Speaker 2: to our families and to our native ecosystems. There's a
Speaker 2: lot of that going on right now. In fact, we're
Speaker 2: having multiple conversations with people in the barrier who want
Speaker 2: to explore opportunities back in India right now.
Speaker 1: You know, Sarah, when I was in college in the US,
Speaker 1: there were always two groups of people you have the
Speaker 1: southeast asians, the Malaysians, Indonesians thais who had no question
Speaker 1: of settling in the west for them, they were there
Speaker 1: to study because they had comfortable lives and capital and
Speaker 1: job opportunities back home and they were all going to
Speaker 1: come back. Whereas those of us from South Asia, we
Speaker 1: basically had only one thing in mind which is to
Speaker 1: make the Westar home. I'm so happy to see what
Speaker 1: you just described, which is that South Asia is becoming
Speaker 1: a bit like East Asia that there is enough of
Speaker 1: an ecosystem that leaving home to go abroad to study
Speaker 1: does not become a one way destination. It can be
Speaker 1: choose to stay there or choose to come back or
Speaker 1: do both through the course of your life.
Speaker 2: Yes. And what what is also further encouraging is that
Speaker 2: it's not limited just to people who have a very
Speaker 2: specific technical skill set like there, you know, the technology professionals,
Speaker 2: nor is this limited just to people who may be
Speaker 2: exited a startup and a huge amounts of capital and
Speaker 2: can
Speaker 2: financially and not have to think twice about moving back
Speaker 2: and setting something up.
Speaker 2: We're also talking about mid career people who are looking
Speaker 2: to see if they can transport the skills and the
Speaker 2: experience that they have back to India. And to be
Speaker 2: fair to the indian senior management and founders, um, a
Speaker 2: lot of them are very open to talking to returning
Speaker 2: indians to explore if
Speaker 2: their experiences can be transported back. So I do think
Speaker 2: that
Speaker 2: this is going to become a reasonably uh reasonably well
Speaker 2: populated pipeline of talent returning indians over the next year
Speaker 2: or two.
Speaker 1: Could you share us with a couple of examples of
Speaker 1: the scale and dynamics in that we're talking about like
Speaker 1: when a startup ceo comes to you,
Speaker 1: Is he or she asking you to help recruit five people,
Speaker 1: 50 people or more? And what kind of fields are
Speaker 1: they hiring and how are they, sort of, how quickly
Speaker 1: are they moving about?
Speaker 2: So, I'm gonna take the second part of that question. First,
Speaker 2: speed is the speed at which these guys move is
Speaker 2: impressive
Speaker 2: and I'm not suggesting they're moving fast just because they
Speaker 2: want to break a few things. Uh, they move fast,
Speaker 2: but they do fairly, they do good comprehensive evaluations of candidates,
Speaker 2: but they just move quickly because
Speaker 2: they just want to get operationalized really quickly. Uh, they're
Speaker 2: all under
Speaker 2: a lot of self, in many cases, self created pressure,
Speaker 2: but these are all driven people, these are all people
Speaker 2: who have made commitments to themselves, maybe to the stakeholders
Speaker 2: that they're going to get to certain points in certain
Speaker 2: periods of time. Uh There is increasingly a lot of
Speaker 2: competitive pressure, any niche that you might be operating in India.
Speaker 2: Um
Speaker 2: so they definitely moved quickly, they move fast, they moved
Speaker 2: decisively um um in terms of the skill um
Speaker 2: again, harking back to the data that that that I
Speaker 2: mentioned earlier,
Speaker 2: um
Speaker 2: the average new startup in a year
Speaker 2: and I'm talking about the entire spectrum from completely bootstrapped
Speaker 2: ones to others that obviously to others that might, that
Speaker 2: might have raised a lot of money
Speaker 2: On average, if you say about 50,000 startups got registered
Speaker 2: last year, the average hiring per startup is maybe 10-15
Speaker 2: in a year. However, however,
Speaker 2: The key thing to keep in mind over here is
Speaker 2: that a lot of these startups are raising between say
Speaker 2: anything between 2030 million 150 million or even more in
Speaker 2: some cases of seed capital,
Speaker 2: which means that on day one they have the ability
Speaker 2: to have a fully functional organization in place as opposed
Speaker 2: to an organization that will grow organically over time as
Speaker 2: they grow.
Speaker 2: And these kinds of startups are potentially hitting the ground
Speaker 2: running with, you know, 100 203 100 employees in the
Speaker 2: first quarter of of operation, which if you think about it,
Speaker 2: you're going from getting a first dollar into the bank
Speaker 2: to having a fully functioning revenue generating organization within three
Speaker 2: months with a couple of 100 people. That is
Speaker 2: quite an impressive task. And
Speaker 2: are we have founders that we work with are completely
Speaker 2: up to this challenge? Uh It's such, such, such impressive people,
Speaker 1: sort of, if you have thousands of startups coming to
Speaker 1: life every year and each trying to hire 10, 20
Speaker 1: people leading to hundreds of thousands of
Speaker 1: people getting employed, that also means there's tremendous competition for talent.
Speaker 1: So how are you advising these employers to keep their
Speaker 1: talents sticky, because I hear a lot about attrition, which
Speaker 1: is not India specific all over the world, that's an issue.
Speaker 1: And so, but how are indian entrepreneurs sort of dealing
Speaker 1: with this challenge?
Speaker 2: The reality is that there's a lot of money chasing
Speaker 2: a very large talent pool, but there is a lot
Speaker 2: of money chasing it right now.
Speaker 2: Um, so there is always, there is
Speaker 2: in the current environment going to a higher degree of
Speaker 2: turn uh than is perhaps ideal for for the ecosystem.
Speaker 2: But what I think increasingly, our founders in India have
Speaker 2: started internalizing is that people don't just leave companies, people
Speaker 2: often leave their managers.
Speaker 2: Um and uh it's really heartening to see that the
Speaker 2: same ecosystem, which a couple of years would have brushed
Speaker 2: off any talk about, say, organizational culture or internal processes. Um,
Speaker 2: these same founders are now at many times either institutionalizing
Speaker 2: such things
Speaker 2: or even when they're starting to build their companies,
Speaker 2: they actually talked to their investors or two advisors like
Speaker 2: us for support on how they can start the ball
Speaker 2: rolling by, by putting a vision statement in place, by
Speaker 2: putting organizational objectives in place by putting the framework of
Speaker 2: culture in place. And the companies that are doing this
Speaker 2: rather than just growing by throwing money at people and attracting,
Speaker 2: attracting talent are often
Speaker 2: being more successful
Speaker 2: and having a lower johN rate.
Speaker 2: I'm not for a moment judging those who, who feel
Speaker 2: the pressure to hire really quickly, because very often the
Speaker 2: decisions are driven by all kinds of external factors which
Speaker 2: are not in your control, but the companies that are
Speaker 2: able to set a framework in place on day one,
Speaker 2: in terms of how they want to build their organizations,
Speaker 2: not just their business, but invariably the ones with materially
Speaker 2: lower
Speaker 2: john roots
Speaker 1: um, share with us your perspective on some of the
Speaker 1: fast growing sectors in India where the most amount of
Speaker 1: capital is going or the most amount of disruption or
Speaker 1: innovation is taking place, like I have in mind, old
Speaker 1: economy sectors like health, education, commerce, uh, tell me how
Speaker 1: those sectors are getting disrupted and if there are other
Speaker 1: sectors that you
Speaker 1: find compelling you to share with us that too.
Speaker 2: So see the three that you named the three or
Speaker 2: four most most popular ones that come to mind immediately.
Speaker 2: Fintech at tech,
Speaker 2: health, tech e commerce of course there there,
Speaker 2: but I think
Speaker 2: if we, if we dig a little deeper in some
Speaker 2: of these um
Speaker 2: what are some of these guys,
Speaker 2: what are some of the really interesting companies in this
Speaker 2: space trying to achieve? And I think that's important because
Speaker 2: a lot of the work that some of these companies
Speaker 2: do also helps to give a lot of credibility to
Speaker 2: the entire ecosystem to show that there's a world beyond
Speaker 2: just super rich founders and table tennis tables in the
Speaker 2: offices and things like that right now, if you look at,
Speaker 2: if you look at Fintech for example,
Speaker 2: one of the great things that has happened through the
Speaker 2: entire boom over the last 23 years
Speaker 2: is the amount of financial includes ability, inclusiveness that has
Speaker 2: been developed,
Speaker 2: no credit being made available to people who were until
Speaker 2: now considered unbanked, kable uh concepts like payday loans now
Speaker 2: of course they come with their own sets of risks,
Speaker 2: not denying that for a moment, but the fact that
Speaker 2: they now exist in the ecosystem conversations they're having about
Speaker 2: these transactions are happening
Speaker 2: and the regulators are beginning to wake up and see
Speaker 2: what they can do to provide
Speaker 2: a balance between between the demand for such
Speaker 2: the facade services and the, and the inherent interests that
Speaker 2: come with them. The fact that these conversations are happening,
Speaker 2: these businesses are starting are definitely, it's a force for
Speaker 2: good for the economy.
Speaker 2: Um, just to jump to another sector that you mentioned, um,
Speaker 2: you you you talked about education, um, now
Speaker 2: there are the very well known areas over here, you know,
Speaker 2: areas like test prep, etcetera, which fundamentally are meant to
Speaker 2: take good students and make them even better.
Speaker 2: Uh or or things like academic counseling in terms of
Speaker 2: providing information and access to students for, you know, based
Speaker 2: on how they've done, what kind of periods they should choose, etcetera.
Speaker 2: But then there are companies that are working at a
Speaker 2: much more grassroots level,
Speaker 2: which are not always associated with the startup ecosystem, which
Speaker 2: is so interesting. I mean, there's one that I just
Speaker 2: want to name and talk about. There's a company called
Speaker 2: Lead
Speaker 2: Schools, which is headquartered out of Mumbai.
Speaker 2: Uh what these guys do is that they focus on
Speaker 2: schools and students which either are from either from underprivileged
Speaker 2: partisan society or from tier to Tier three cities where
Speaker 2: the access to quality education could potentially be a challenge.
Speaker 2: And what these, what what this company, what companies like
Speaker 2: these do is that and lead as there's a market
Speaker 2: leader in this space. They
Speaker 2: the on board such schools onto their platform, They've unloaded
Speaker 2: thousands of schools and then they provide a standardized quality
Speaker 2: of education, holistic academic experience for Children across studies and
Speaker 2: other things by standard, standardizing the curriculum, standardizing teacher training,
Speaker 2: providing standardized infrastructure
Speaker 2: as a result of which
Speaker 2: kids who otherwise might have struggled to have access to
Speaker 2: quality education, know that if you know that by going
Speaker 2: to a certain branded institution, they can have
Speaker 2: a certain basic quality of education which
Speaker 2: it was just not available earlier.
Speaker 2: The point I'm trying to make over here is that
Speaker 2: it's not just about big valuations and the stuff that
Speaker 2: you see on tv every day, there are also companies
Speaker 2: working to actually make a difference. And these are the
Speaker 2: ones that I feel that are really adding validation to
Speaker 2: the entire startup ecosystem. If you look at abby text,
Speaker 2: that's another area that doesn't get talked about a lot,
Speaker 2: but it's becoming more and more important, there are companies
Speaker 2: currently that are working
Speaker 2: and removing various disruptions and various intermediary layers at various
Speaker 2: points of the value chain in agriculture, making it easier
Speaker 2: for farmers to go to market, making it cheaper for
Speaker 2: them and removing various inefficiencies in the marketplace. Right. But
Speaker 2: these are again not necessarily companies that that that that
Speaker 2: get a lot of bandwidth but
Speaker 2: but they make a huge difference in parts of India
Speaker 2: that that that really need this
Speaker 1: uh and on the health side, any interesting developments you're seeing.
Speaker 2: Yeah, yeah, for sure. I mean of late a lot
Speaker 2: of the developments, a lot of it has been about
Speaker 2: creating access, right? I mean the number of people who
Speaker 2: have used these services um uh the health tech services
Speaker 2: in the last year in India to access very specific uh,
Speaker 2: components of care,
Speaker 2: be it ambulances, beit, beit telehealth, be it advice on, on,
Speaker 2: on covid related issues that's just off the charts. But
Speaker 2: then you what this ecosystem is also a lot of
Speaker 2: people to do is is medical health professionals like scientists,
Speaker 2: for example,
Speaker 2: who want to, who have an idea about developing a
Speaker 2: very specific say cancer market test,
Speaker 2: which uh, in isolation if it developed and used correctly,
Speaker 2: can either significantly reduce the cost of testing that a
Speaker 2: patient might need to might need to undergo otherwise or
Speaker 2: maybe even change the entire route, the, the entire treatment
Speaker 2: route in terms of making it clear whether surgery is
Speaker 2: needed or not needed, etcetera.
Speaker 2: Things like this are also coming up all the time
Speaker 2: right now. And it's very good to see, you know,
Speaker 2: some of the traditional investors, the big name VC firms
Speaker 2: are also investing very heavily in this kind of space,
Speaker 2: which is again, I know from having worked with some
Speaker 2: of these companies making a huge difference in the lives
Speaker 2: of cancer patients
Speaker 1: in this two year Covid pandemic saga. Are there any
Speaker 1: major examples of the entrepreneurs in India coming together with
Speaker 1: the government and helping solve some of the problems that
Speaker 1: have
Speaker 1: being posed by this pandemic.
Speaker 2: Um, yeah, for sure. And, and again, you know, you
Speaker 2: talked about scale and dynamics him earlier and I think
Speaker 2: it's such a huge validation of the kind of contribution
Speaker 2: um this ecosystem is making, you know, for example, when,
Speaker 2: when arrogance say to the, the indian test and trace
Speaker 2: app
Speaker 2: uh was created um I think it must have been
Speaker 2: about 1.5 or close to two years ago,
Speaker 2: a bunch of India's leading uh startup founders got together
Speaker 2: with various government arms to brainstorm and help you build
Speaker 2: this app out. So there's been a huge contribution from,
Speaker 2: from the ecosystem from from the startup founders uh to
Speaker 2: to that.
Speaker 2: And it's just supposed to show you know, what used
Speaker 2: to be perhaps thought of as a bunch of bunch
Speaker 2: of college kids just going down a rabbit hole. The
Speaker 2: same ecosystem now has a seat at the table and increasingly,
Speaker 2: you know, they are being consulted in matters of policy
Speaker 2: uh in in in in all kinds of issues that
Speaker 2: are coming up at a state or central government level
Speaker 2: which you can't ignore them anymore.
Speaker 1: Really fascinating. I just want to go back to a
Speaker 1: very personal context of yours. So you went to, I
Speaker 1: am ahmedabad, I'm pretty sure from your graduating class majority
Speaker 1: of the students went overseas to pursue a career initially,
Speaker 1: whether they came back or not is a different story.
Speaker 1: Do you think that dynamic Zim is changing because of
Speaker 1: the activity that you're sort of alluding to that
Speaker 1: even for an I am glad there is a job
Speaker 1: that is interesting enough that has remuneration substantial enough to
Speaker 1: remain in India,
Speaker 2: I think there's, I think there's, there's another angle to
Speaker 2: it as well. I think when you're talking about an
Speaker 2: earlier generation of students, um,
Speaker 2: I think the West was seen as relatively inaccessible and
Speaker 2: therefore very aspirational. Um, as you mentioned earlier as well,
Speaker 2: people from Southeast Asia, we're going there to just to
Speaker 2: study people from South Asia, we're usually going there to
Speaker 2: try and move. I think increasingly, what we're seeing is
Speaker 2: even kids who do want to go abroad,
Speaker 2: I want to go back and more for the experience
Speaker 2: and the exposure,
Speaker 2: but are not necessarily treating the West as the holy
Speaker 2: grail of, you know, once I go there, there's no
Speaker 2: way I'm coming back.
Speaker 2: Um,
Speaker 2: and
Speaker 2: in addition to some constraints that have been imposed by
Speaker 2: developing countries in terms of immigration, etcetera,
Speaker 2: I think the bulk of it boils down to the
Speaker 2: ecosystem that has been brought back home exactly as you
Speaker 2: were saying. Um, if you can be part of a
Speaker 2: growth story in an exciting startup set up by people
Speaker 2: that you can relate to who might be four or
Speaker 2: five years senior to you have a similar background as yours. Um,
Speaker 2: and can intellectually stimulate you to the same degree.
Speaker 2: Uh,
Speaker 2: And if the growth that you can now see in
Speaker 2: your career is no different from the growth that you
Speaker 2: would have in a barrier startup and you're working in
Speaker 2: your native ecosystem. Um it's not obvious anymore at all
Speaker 2: that you should live for, you know, 10,000 miles away
Speaker 2: from home.
Speaker 2: Speaking of the ecosystem. Right?
Speaker 1: Absolutely. So speaking of that ecosystem, how open is that
Speaker 1: ecosystem to skilled professionals from overseas?
Speaker 2: Very open, very open. Uh like like I was saying earlier,
Speaker 2: there is increasing interest in coming back to India for
Speaker 2: mid and late career processions um, and finding and, and
Speaker 2: and founders or cXs in India are always open to
Speaker 2: you
Speaker 2: to having conversations with people who want to come back
Speaker 2: to India to see if the exposure, they have had
Speaker 2: the experience, they've had the skills they've
Speaker 2: built up would be value additive to their to their
Speaker 2: companies in India. We haven't had, I think even a
Speaker 2: single instance of somebody who's interested in coming back to
Speaker 2: India and hasn't been able to have really interesting and
Speaker 2: informed conversations with potential employers in India.
Speaker 2: Um
Speaker 2: in fact, in fact if, if I may want to
Speaker 2: just take this opportunity to also flip this around a
Speaker 2: little bit, a lot of stock, a lot is said
Speaker 2: about returning south asians, but what interestingly we've also started
Speaker 2: seeing that within the region there is now interestingly increasing
Speaker 2: demand for South asian startup professionals from companies
Speaker 2: outside of India,
Speaker 2: like in Southeast asia or um or in the Middle
Speaker 2: East as those started because systems start growing rapidly. Well
Speaker 2: Indonesia has been growing rapidly for a while, but as
Speaker 2: they start catching up with India and they start solving
Speaker 2: more and more of the same problems that people solved
Speaker 2: in India
Speaker 2: they want to talk to and potentially employ people from
Speaker 2: India to see if they can help them solve the
Speaker 2: same problems
Speaker 2: outside. Uh and this is not related to just take talent.
Speaker 2: This is also people from marketing, growth finance, investor relations,
Speaker 2: all of that. So I think it's a, it's a
Speaker 2: true validation of how well the ecosystem has grown in
Speaker 2: that there's returning talent from overseas, but it's also exporting
Speaker 2: a lot of talent overseas now.
Speaker 1: And what about non indians? Are they also showing up
Speaker 1: more and more by that. I mean our indian startups
Speaker 1: or even like more advanced companies subjecting their top leadership
Speaker 1: to sort of global competition.
Speaker 2: Um, there is definitely interest in that, especially at the
Speaker 2: complete top end of the unicorn list. Uh Covid has
Speaker 2: definitely thrown a spanner in that at least for the
Speaker 2: time being, because global mobility has in general been a
Speaker 2: little been a little limited. But um, as we emerged
Speaker 2: from the pandemic, I'm already seeing the first stirrings of
Speaker 2: interest in that again from indian companies.
Speaker 2: Uh and I'm reasonably confident that that comes back, but
Speaker 2: there is definitely openness. I think,
Speaker 2: I think you have to say that about the indian ecosystem.
Speaker 2: They are open to all kinds of ideas and thoughts.
Speaker 2: They don't have,
Speaker 2: they're typically not constrained by things like the degree or
Speaker 2: years of experience or any of the other usual filters
Speaker 2: that are applied in traditional recruitment situations. Uh they're far
Speaker 2: more open, far more flexible and they look for the
Speaker 2: value that an individual can add
Speaker 2: as opposed to necessarily what letters he has next to
Speaker 2: his name.
Speaker 1: Sort of the Indian markets, private or public have gone
Speaker 1: through an extraordinary boom in the last 18 months or so.
Speaker 1: So it's a strange juxtaposition. We have the pain inflicted
Speaker 1: by the pandemic, but we also have a record liquidity
Speaker 1: record investment coming in and you know, the record number
Speaker 1: of unicorns, uh you know, taking place in India last
Speaker 1: year
Speaker 1: 2020 is very likely to be characterized by higher interest
Speaker 1: rates and less liquidity. And in the first few weeks
Speaker 1: of the year we've already seen whether it is in
Speaker 1: India or in the US significant market volatility.
Speaker 1: So what kind of risks do you see in the
Speaker 1: horizon as this era of cheap cash starts coming to
Speaker 1: an end?
Speaker 2: Um
Speaker 2: I think
Speaker 2: if you're talking about India in particular
Speaker 2: India benefits a little bit by the fact that it
Speaker 2: already has a very well developed platform.
Speaker 2: The ecosystem has already been validated by the amount of success,
Speaker 2: it's had 70, 80 unicorns and how many times that
Speaker 2: number in the 500 million to $1 billion dollar bracket.
Speaker 2: So in terms of international investors and and the number
Speaker 2: of alternatives um are perhaps not
Speaker 2: not that high because there have been disruptions in various
Speaker 2: countries where when money also used to flow over the
Speaker 2: last couple of years, such as china,
Speaker 2: so interest rates going up to the extent that that
Speaker 2: will cause a little bit of liquidity. That caused a
Speaker 2: significant liquidity crunch
Speaker 2: in general.
Speaker 2: I'm not sure that that makes a huge impact yet
Speaker 2: on the indian startup ecosystem, because
Speaker 2: the indian indian started because system is getting very integrated
Speaker 2: into the fabric of daily society. It's like we were
Speaker 2: talking earlier, you know, things like healthcare, things like education,
Speaker 2: things like financial inclusion, these are undergoing complete transformations because
Speaker 2: of the force for good
Speaker 2: that the indian startup ecosystem has fundamentally become and which
Speaker 2: is why it's growth is fundamentally, I think not going
Speaker 2: to be altered by normal economic cycles, of course it
Speaker 2: will be impacted to some extent.
Speaker 2: But when people talk of risks in the context of
Speaker 2: the startup ecosystem, they are looking for 199, style internet
Speaker 2: bust where the ecosystem was ravaged completely ravaged
Speaker 2: what the companies in India are doing in terms of
Speaker 2: solving fundamental issues of access of of infrastructure, of democratizing
Speaker 2: things like quality and education,
Speaker 2: these, I don't think are going to get slowed down
Speaker 2: because of economic cycles,
Speaker 2: but when you talk of risks, if I may um
Speaker 2: what I
Speaker 2: talk about with some of my founder friends is that
Speaker 2: the risks might be as much as much internal as
Speaker 2: as as external.
Speaker 2: Um you know, one of the closest parallels I can
Speaker 2: think of is around the GFC when a number of
Speaker 2: financial institutions were completely uh completely transformed as a result
Speaker 2: of the actions before the GFC.
Speaker 2: Now, if you heartburn hindsight is always 2020 and without
Speaker 2: pointing any fingers at any individuals or any institutions, the
Speaker 2: fact is that if you look through all the literature or,
Speaker 2: and there's been plenty written about what happened during that period.
Speaker 2: If you, if you kind of deep dive into it,
Speaker 2: a lot of it boils down to two things, hubris
Speaker 2: and lack of internal controls
Speaker 2: a week into look influence and that's what I think
Speaker 2: our founders are external stakeholders only to keep an eye
Speaker 2: out for to make sure that hubris doesn't get ahead
Speaker 2: of itself or doesn't doesn't impact how the companies are
Speaker 2: being organized, how they're performing and
Speaker 2: very importantly, not handing over
Speaker 2: internal controls as somebody else's problem within the company, making
Speaker 2: how you look at your control framework as something very
Speaker 2: fundamental to how you do business. If you have these
Speaker 2: two things in check. I think internally most problems should
Speaker 2: most of the key risks should get taken care of.
Speaker 1: So I think those two factors apply both at the
Speaker 1: micro as well as the macro national level. So I
Speaker 1: think your, your point is very, very well taken Sarah,
Speaker 1: thank you so much for your time and insight. This
Speaker 1: was really, really interesting.
Speaker 2: Thank you very much more uh pleasure being over here.
Speaker 2: Look forward to catching up soon.
Speaker 1: Absolutely. And let me thank also our listeners Kobe time
Speaker 1: was produced by martin, tacky daisy Sharma and violently provided
Speaker 1: additional assistance.
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