“Startups must live within their means”

The startup ecosystem is currently going through a lot of difficulties. We are seeing layoffs and the funding tap seems to have dried up.

The fear of God that I run out of money is necessary. And I don’t think that’s a bad thing. This is a much needed healthy market correction as the party is over. You have to learn to live on your own. You have to live with more discipline. You cannot have these losses. You cannot live beyond your means and expect to make more money. Where I’m from, entrepreneurs are still starting businesses and we’re funding them.

Layoffs are fine. And I find that we have an easier time hiring people and people have an easier time finding a place in (Silicon) Valley. Millions of dollars in salaries, it’s unsustainable. Finding tech talent was getting so hard. Startup activity is a bit cyclical. When the recession is here, start-up activity begins to happen. People have lost their jobs. It’s easier, your rents are low, your salary expectations have dropped. It’s the best time. Startup activity occurs at the bottom of the recession. And so, where I operate, I don’t see any collapse. The same seems to be true in India.

You’re still finding early-stage takers, but late-stage venture capital funds have pulled out. Your catch.

They (the companies in the development phase) should already be profitable. They should have learned to live. Look at Paytm. How old is he ? 20 years, right? How can you not make money when you have several 100 million dollars in income and for about 20 years? When would you make money (profits)?

By this logic, many unprofitable companies enter the stock market. The narrative seems to change.

This story was built by people who weren’t there when this winter came, weren’t they? The main factor is the entrepreneur, disciplined leadership, the entrepreneur makes more difference than money (capital). So in capitalism, ultimately, you know, capital has to be returned. Nobody puts capital indefinitely in a bottomless pit.

Has India become an excellent alternative to other markets?

I am here (in India) only two days. And I noticed, there’s something about energy and we’re expected to be in motion, you can feel it, you can feel it when you meet people, but I wouldn’t use not the word that India has arrived or emerged, I would say India is coming, an emergence and everything seems to line up in your path.

There is capital flowing into India, China is in trouble and Europe is in trouble. So India seems to be the country where you should put your money, that’s where the future belongs, that sense is there.

But that said, we have squandered our opportunities in the past. In 2047, India will have 10 million startups and entrepreneurs. That’s when we would have arrived. The policy framework, everything has to, our infrastructure framework has to be focused on that, and we’re creating a million entrepreneurs.

In India we have seen that domestic capital is now on par with global capital and we have seen in 2021 a lot of rupiah funds have been raised where companies, OFIs are finding this private investment as a very viable option. Are we now in a position to not depend so much on dollar capital?

Stop there. I think if we can mobilize all the capital, it will not be enough. We need a massive injection of capital. We shouldn’t worry about dollar capital yet. India is a poor country. If you need billions of dollars of new capital will not be available in India, and we need to think of millions of entrepreneurs, 10 million entrepreneurs, and capital is the lifeblood of entrepreneurs, we should welcome and mobilize all the capital in India, but we must also welcome capital from everywhere.