Sam's Twelve Commandments-For the Indian Entrepreneur

By Sam Santhosh

India's growing economy, business friendly policies and the availability of new technologies have inspired thousands of youngsters to create their own startups. However, the first-time entrepreneurs face numerous challenges in their entrepreneurship journey. From deciding the right time to start, to raising funds and get to a successful exit is a journey filled with unexpected bumps and ditches. With over 35 years of experience in starting and building successful companies in the fields of Software and Genomics, both in the U.S and in India, Sam Santhosh provides practical guidelines for creating and sustaining successful ventures useful not only to entrepreneurs, but also to all players in the startup ecosystem.

• Language: English
• Publisher: DC BOOKS
• Release date: Jan 28, 2023
• ISBN: 9789356434875

Sam Santhosh

India’s growing economy, business friendly policies and the availability of new technologies have inspired thousands of youngsters to create their own startups. However, the first-time entrepreneurs face numerous challenges in their entrepreneurship journey. From deciding the right time to start, to raising funds and get to a successful exit is a journey filled with unexpected bumps and ditches. With over 35 years of experience in starting and building successful companies in the fields of Software and Genomics, both in the U.S and in India, Sam Santhosh provides practical guidelines for creating and sustaining successful ventures useful not only to entrepreneurs, but also to all players in the startup ecosystem. A blend of history, science, business and humor, the book hopes to inspire and guide the next generation of Indian entrepreneurs.

Book preview

Preface

This is not exactly the book I set out to write. I wanted to address the Indian entrepreneur as I have done in this book, but I had a grander plan – the idea was to show how to build a unicorn while reducing the chances of being a roadkill. The book I had planned was supposed to have three parts. The first would focus on the Indian psyche and its evolution over the last 3000 years; the second on starting and building your first company mainly based on my experience; and the third on how to build a unicorn. The commandments were supposed to be a chapter at the end of the second part where I would summarize my learning and experience. However, not only did that book idea turn out to be a bigger enterprise than I had anticipated, but I was also concerned whether such a long book would interest the reader. Hence, I decided to temper my ambitions and write a smaller book focusing on the commandments and condense the supporting material for the Indian psyche into one chapter on Indian History and Culture. The part about building the unicorn has been saved for a later book.

Once I had revised my plan, this book practically wrote itself. Being an avid reader, I had always wanted to write and started several times on different themes. Just like in business, I had no dearth of ideas, but each book effort would stall after some time. Either it would need a lot more research which I did not have the time for, or it would start looking less glamorous as time went by. A book on entrepreneurship had always been on the list, but I had kept it for my post-retirement days. However, as I saw thousands of youngsters in India jumping in to start their companies, I felt the time for this book had come. I am sure some of them will be tremendously successful; but I am more concerned about the many that would struggle or linger in mediocrity. This book is for them.

I have spent the last 3 decades of my life as an entrepreneur. I started my life in India, had all my formal education there, and then moved to the US in 1991, looking for opportunities in the software industry. But I was lucky in that I always had one foot in India as all my companies had an Indian component that would require me to travel at least six to seven times a year to India. The first 20 years of my entrepreneurial journey was in the software industry and during that time, I did business in over 12 countries, which gave me a good global perspective. During this time, with the main development centres in the US and India, I set up offices and recruited employees in the UK, Japan, Australia, China, Dubai, and Singapore while acquiring eight small companies as well. This was an eye opener for me on how the culture and environment of each country affected the behaviour of the entrepreneur and the employees, and the importance of understanding that well, to manage them effectively. I also made some of the common mistakes that many startups commit and some specific ones that people of Indian origin have a much higher tendency to. I have leveraged that experience to build up the first nine commandments for the Indian entrepreneur.

Further input to the book came from my experience in the last 15 years after I moved out of the software industry and started my ‘second innings’ in biotech (genomics to be specific). This period gave me an opportunity to play the game differently, leveraging my experience and implementing many of the points I mention in the first nine commandments. It also gave me a different perspective of the New India with more prosperity and opportunity but with the same inner contradictions as before. Moreover, the new challenges faced by Indian entrepreneurs, such as exiting from their company, leading a life of continuous learning, and understanding their place in the universe, helped me to frame the last three commandments.

This book follows a simple structure that you can see from the Table of Contents. The Introduction is important as it lays the basic foundation of the book and its objectives. It is followed by a chapter on how the Indian psyche developed over the 3 millennia. Each of the following chapters is a commandment arranged roughly in the order of how an entrepreneur’s journey through their first startup would take. Finally, I have included an article in the Appendix on how humans have started to overcome their genetic destiny. As the title implies, the underlying emphasis of the book is on the Indian psyche and is meant for the Indian entrepreneur, but I guess most first-time entrepreneurs will get some benefit from the book. Those who have a fascination for India and its history are sure to enjoy it even more.

Introduction

Why India?

India has become the land of opportunities!

The Indian resurgence since 1992 has been amazing – to say the least. The lumbering elephant has woken up. And the whole world has taken notice. Despite the irritants caused by a crumbling Pakistan, saber rattling by a jealous China, Maoist as well as religious ferment created in different parts of the country by external and internal forces, India’s democracy survived, the economy grew by leaps and bounds, and millions of people moved out of poverty. India’s problems have not all been solved – 250 years of colonialism and 45 years of ineptitude cannot be rectified within 30 years. But Indians now exude confidence, they feel that they can not only take on the world but also conquer it.

Sanjeev Sanyal’s The Indian Renaissance: India’s Rise After a Thousand Years of Decline published in 2008 was the first insightful book that gave a masterful account of India’s missteps after its political independence in 1947 and the remarkable growth after its economic independence in 1992. Shashi Tharoor’s The Elephant, the Tiger and the Cell Phone published in 2007 and written in his inimitable style is as the book says, ‘Reflections on India – the emerging 21st century power’. Both these books presented a clear picture of the changes happening in India and were quite optimistic of India’s prospects. It was also a very critical time for me personally when these books came out and I got a chance to read them. I had decided to move out of the software industry where I had been active for the previous 20 years with my base in the US and venture into genomics, but the confidence to focus on India partly came from the insights that these books provided. Moreover, Sanyal’s exposition on India’s history and Tharoor’s description of Indianness got me thinking on how Indian culture affects the mindset of Indian entrepreneurs, which culminated in this book. The enthusiasm of both authors about India’s prospects was also extremely infectious and I am very obliged to them. Both authors are also very active in India now, with Sanyal becoming the Principal Economic Advisor to the Prime Minister and Tharoor a Member of Parliament for the Indian National Congress party. However, even they might not have expected the dramatic growth of the Indian economy in the last 2 decades, which would result in the creation of over 100 unicorns by 2022 (and expected to double in the next 2–3 years), and a hardly known Indian businessman Gautam Adani becoming the second richest man in the world.

The numbers on the economy give a more detailed picture. The market cap of the Indian stock market grew from $44 billion in 1992 to $3500 billion in 2022. From 1992, foreign portfolio investors were allowed to invest in the equity market and they now account for about 20% of India’s stock market capitalization. Investor interest has been really high in India’s information technology (IT) service sector as a result of India’s IT boom in the 90s. IT-BPM¹ contribution to India’s GDP grew from less than 1% in 1992 to 7.5% in 2022. In the same period, the Indian economy grew from $288 billion to $3173 billion. The global list of billionaires which had just three Indians in 1992 has 166 in 2022 as per Forbes, still pretty far behind the US (735) and China (539), and projected to grow to 357 in the next 10 years according to an AfrAsia Bank study.²

Foreign investment in India has been rising steadily and most international venture capital (VC) funds have a presence in India now. One of the largest and most well-known VC, Sequoia Capital has done about 300 deals in the last few years.³ Other VCs have not been far behind. In 2021 alone, VC funds invested over $38 billion in India which grew from $3.1 billion in 2012.⁴ Private equity (PE) players and sovereign funds have also been very active in India. From 2003 to 2018, according to McKinsey report,⁵ PE funds invested nearly $100 billion in India. Though funds like Blackstone and KKR lead the group, hedge funds like the US-based Tiger Global and the Japanese investment bank SoftBank have made more noise by making large bets and giving their portfolio companies like Byju’s and Ola very high valuations.

India’s central government as well as most state governments have launched different programmes to encourage people to consider entrepreneurship. This has helped in motivating thousands of youngsters to start companies of their own instead of opting for a safe and steady job. Entrepreneurship is no longer a bad word in India. With a formal startup registration in place now, India counts over 75,000 startups across the country. Most of the focus of entrepreneurs as well as the VC money is on IT and e-commerce. The focus on IT is understandable as it was the key to driving the country’s revival and giving India the global recognition and confidence over the last 3 decades. The e-commerce boom has been a different story. A large country with poor infrastructure suddenly opened up for business as the internet, computers, and mobile phones converged to enable businesses to reach a billion consumers. Of course, the multinational giants also took notice, but the Indian legislative roadblocks gave local companies some time and room to build up. Flipkart (an Amazon look alike) became the most well-known and largest among them while companies like Ola (Uber model), Paytm (payment processing), Byju’s (online education), and others took off in their own respective areas.

India is also witnessing the development of angel funding networks which was hardly available 20 years back. The wealth created by the earlier wave of IT companies and the current e-commerce firms have created the first set of India’s rich and successful entrepreneurs who are now keen to help the new generation succeed. Several angel networks have sprouted up in different parts of the country led by High net worth individuals (HNIs). In addition to giving startups their first round of funding, these angels are playing a significant role in mentoring and guiding the young entrepreneurs. The billionaire HNIs have their own family funds, like Premji Invest owned by Azim Premji, that are investing both in early startups along with angels and in later rounds of funding along with the VC firms.

Resurgent India in the Global Context

As India rises to become a world power, it is important to look at the playing field and the forces that are currently driving global politics and economics. With the fall of Communist USSR at the end of 1991, the US became the sole superpower. However, the euphoria that followed the end of the Cold War did not last long. America’s foreign policies have always been flawed – the country’s leaders never saw a reason to practise externally the strict policies they had implemented domestically – to follow the law in a fair and impartial manner. The excuse of preventing communist expansion had earlier justified their interference in many small countries across the world or even supporting cruel dictators while toppling democracies. Indians and Bangladeshis can never forget the callousness of Nixon and Kissinger⁶ when Pakistan used the weapons and funds provided by the US to massacre hundreds of thousands of Bengalis and drove 10 million refugees to flee to India. Many other countries have similar stories to tell. One of the reasons why America’s leaders were able to get away with this over many decades was the complete ignorance of the American public of international affairs. Though American products and American culture was spreading across the world, and the country welcomed immigrants, Americans at large remained oblivious of other countries especially the non-European ones. A small percentage would have travelled abroad as tourists but that would mostly be to Europe and maybe to a few exotic destinations like Bali. A popular joke about these tourists was their question, ’Where in Bali is Indonesia?’

The lack of awareness in the US of the developments across the world was brought into sharp focus when Americans were cataclysmically jolted by the 9/11 attacks on American soil by Islamic terrorists using American passenger planes as weapons. The US has always been admired by most people across the world and Americans were at a loss to understand why a few would see them as the Great Satan and would go to any lengths to hurt their country. Though the US was quite successful in the subsequent war against terror, its fundamental lack of understanding of other cultures led