Why Indian Professionals Succeed As Entrepreneurs in the US?

Why Indian Professionals Succeed As Entrepreneurs in the US and Less So In India?

by Ignatius Chithelen

Author "Six Degrees of Education – From Teaching in Mumbai to Investment Research in New York"  
Presentation at private event, New York, March 5, 2013* 



Indian billionaires in the US and India – some questions:

•How did Vinod Khosla become a billionaire in the Silicon Valley?

•If opportunities in India are so great why did Tata buy Land Rover & Tetley Tea in the UK?

•How then did the engineer founders of Infosys  become billionaires in Bangalore?

Why Indian Professionals do well in the US? Fierce Competitors

•Immigrants - top 0.1% of students in India

•Good technical skills. Strong work habits

•Non business castes – yet fierce competitors

•Ambitious. Want to make money

•Climb ladder - move to new jobs, more money

•Spouse too have good jobs – build savings

•Pursue new business ideas – nights, weekends

America: take risks & get rich


•Celebrates risk taking and getting wealthy

•Ok to fail. Often a plus to find another job

•High paying tech/skilled jobs easier to get

•Demand:
–New markets, especially technology, web

–Competition, Growth/survival – new solutions

•Capital from friends, angel, venture, equity

•Share wealth created: equity, options, legal


Vinod Khosla one of five Indian Billionaires on Forbes 400


•Son of Indian army officer; no family business experience

•Electrical Engineering- Indian Institute Of Technology

•Failed with soy milk start-up in India

•1980 Stanford MBA; a founder of Sun Micro

•1986 Venture capital Kleiner, Perkins

•2004 founded Khosla Ventures

•2012: $1.4 billion net worth - Forbes 400.

 Vivek Ranadive Founder TIBCO Software


•MIT: BS, MS Elect. Engg.; Harvard MBA

•Manager at Ford Motor Co

•Founded software consulting firm

•1997 TIBCO – services & business software

•2012 Sales TIBCO: $1.02 billion.

•Stock market value: $3.5 billion.

•Ranadive owns 9%. Net Worth $300 m plus

Professionals in India: Study hard, find a good job. Business is Risky


•Professionals – mostly non business castes

•From childhood: Study hard. Find a good job

•Business is very risky – leave it to the Vaishyas, the business castes

•High unemployment – difficult to find jobs

•Business success: numerous unethical cases

•Examples of owners stealing good ideas

•No wealth sharing. No legal remedy

•For risk takers political leadership better path


Bureaucracy in India, not remnant of socialist days: Protects oligarchs. Tata Companies Expand in the UK not India.



•Major markets controlled by oligarchs, state enterprises and global Multi Nationals

•Control over licensing, credit and capital

•Bureaucracy – not socialism – but barrier to new entrants, including other oligarchs

•Balance of terror among oligarchs – keep away or will push into new rival’s business areas

•Tata Group: UK - Land Rover, Tetley Teas, steel. US - Vitamin Water. Africa - tea estates


Infosys founder: a tech billionaire in India


•1981 Infosys founded by N.R.Narayana Murthy and six other engineers

•Murthy’s father, a school teacher, could not afford to pay son’s Indian Inst. of Tech. fees

•Infosys rode boom in IT outsourcing to India

•Revenues: $7 billion; Stock value: $31 billion

•Infosys gives stock to employees. Rare in India.

•Murthy, a billionaire, lives modestly


Successful professional venture in India:


Biocon A bio tech company. Founded 1978.
  Kiran Shaw; BA Zoology; MS: Brewer, Australia

  Started as exporter of industrial enzymes
  Backed by Irish Co./Unilever till 1998


Why did Infosys succeed in India?


•Demand - new markets, including foreign

•Supply - highly skilled intellectual content

•Little capital to start: $250 for Infosys

•No initial competition – Oligarchs not aware

•Grow under the radar. Avoid hostile states

•Potential areas for India based entrepreneurs: IT & web; education; medical research and services; financial services.

*Outline of presentation by Ignatius Chithelen at an university club in New York,  March 5, 2013.

Based on the essay  Entrepreneurs in India and Abroad by Ignatius Chithelen and Shankar Parameshwaran, from The New Oxford Companion to Economics in India, Oxford University Press 2011.



Ignatius Chithelen is author of "Six Degrees of Education: From Teaching in Mumbai to Investment Research in New York"

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