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Striking
gold, the American way
Indians
from technical backgrounds were instrumental in spawning a
whole array of business ideas in the US ranging from mundane
body shops to hi-tech fibre-optic, wireless and supply-chain
systems, says Mohan
Babu
‘The
list of successful Indians who have made it big in corporate
America reads like a who’s who of the business world.’
If
I were to tell you that Indians in the US are entrepreneurial,
you will probably give me a quizzical look since most Indians
we know — our cousins our siblings are probably professionals.
And, in today’s day and age, they are more likely to be software
professionals or techies in the US. The word entrepreneur,
to most of us, conjures visions of a person who runs his own
enterprise, bringing together resources like land, labour,
capital and his entrepreneurial skills, in the process amassing
wealth.
Most
Indians, especially those from middle-class backgrounds are
quite risk-averse, especially when it comes to business and
ventures. We are led to believe that the only way to achieve
steady success in life is by studying hard, focusing on education
and later excelling in our chosen vocations or careers. However,
the American Dream contradicts this notion. It is every American’s
dream to strike gold by thinking of an ‘All American’ product
or idea, selling out and making millions.
It
is a fact that there are thousands of people of Indian origin
in the US who are entrepreneurs in the conventional sense.
They run gas stations (petrol bunks), motels, restaurants,
Indian bazaars and other small businesses. Many of them are
from the highly industrious Gujarati community who came to
the US during the seventies and early eighties after they
were uprooted from their homes by African dictators. They
were granted asylum in the US, UK and other countries and
decided to settle here. As per one research report, over 70
percent of motels in the US are owned by Patels.
Many
Indians, who came to the US as H1-techies during the boom
of the nineties, also caught the entrepreneurial bug. Of course,
the runaway success of a (then) young Indian Stanford graduate
who sold his company to Microsoft for a whooping 450 million
dollars really captured the imagination of a whole generation.
Sabeer Bhatia not only became in instant celebrity but also
gave inspiration to thousands who tried to emulate his accomplishment,
many of them successfully.
Indians
from technical backgrounds were instrumental in spawning a
whole array of business ideas ranging from mundane body shops
to hi-tech fibre-optic, wireless and supply-chain systems.
The list of successful Indians who have made it big in corporate
America reads like a who’s who of the business world. On one
hand we have the likes of Vinod Khosla (founder Sun Microsystems),
Sanjiv Sidhu (I2) and Pradeep Sindhu (Juniper), on the other
hand, we have the troves of friendly-neighbourhood body-shoppers.
And of course a whole range of entrepreneurs in between.
During
the early years of the tech boom, one of the most popular
‘business ideas’ was to start a technical consulting company.
All one had to do was to place an advert in the local newspapers
in Bangalore or Hyderabad, sift through the hundreds of resumes
that would pour in and pick up the most promising candidates
and sponsor their H1 visa. Once the candidates landed in the
US, hi-tech companies, hungry for bodies would grab them like
hot cakes. The middleman would keep his cut of billing rate
and go scouting for more bodies to “import”. There were little
or no barriers to entry in this business and there were hundreds
of body-shoppers operating in the US. Of course, all this
changed once the economy started going south. Companies that
were once hungry for programmers started becoming weary of
body shoppers and middlemen. They started questioning the
need to employ a teaming workforce just to keep their IT systems
running. The result of all this is that the tribe of body-shoppers
has all but vanished, but that’s another story altogether.
Starting
a company in the US is an extremely straightforward process.
Of course, legally, one can operate a business as a sole proprietorship
or a partnership but that is riddled with risks and very few
venture down that path. Given the risks involved in operating
a business, it is better to “incorporate” the business into
a corporate entity. However, unlike India, where one has to
move mountains before one can incorporate a company, the process
in the US (at least in most states) is quite straightforward.
All one needs to do is to fill the necessary forms, which
can be obtained from the secretary of the state where one
resides. After filling the forms, one submits them along with
the prescribed fees and one is given a certificate to operate
as a business entity. The other paperwork like getting a tax
id, opening a bank account etc is equally simple and does
not involve a tremendous amount of paperwork. There are very
few bureaucratic hurdles one faces and the whole process of
starting and operating a small corporation is extremely streamlined.
Incidentally, US also allows foreign residents and temporary
workers to open operate corporate entities in the US. Of course,
there are certain restrictions, but any corporate lawyer would
be able to guide you. The result of all this is that the process
of forming a business entity is extremely streamlined, leaving
the entrepreneur to focus on the nitty-gritty of running a
business.
During
the dotcom boom period, it was everyone’s dream to come up
with the killer Web-portal. With very few barriers to entry,
even half-baked ideas were getting attention and capital.
If there is any good that has come out of the current dotcom
crash (and the economic downturn), it is that people are taking
a hard look at their business plans. They are looking at how
their business is making money, and are trying to become leaner
and meaner. Real good ideas and business models are only going
to survive and grow.
The
US economy might be a wee bit slow, but the entrepreneurial
spirit still seems to be going strong. I won’t really be surprised
if another Sanjiv Sidhu announces an IPO once the cloud of
gloom lifts. Until then, it is the survival of the fittest.
Isn’t that what entrepreneurship is all about?
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