Rise of the India-US SaaS Corridor | Chanchal Bhoorani from WestBridge Capital

[00:00:00] Chanchal: India today is the largest number of software developers and largest numbers of also open source contributors, etc.

[00:00:07] Chanchal: We've not learned to do PLG well, the only handful of companies that have done well, especially because, you know, build, building software, building product is our key strength.

[00:00:18] Chanchal: When you are building zero to one speed of product development really matters and, customers do take note of how fast, are you iterating? How fast are you shipping out new features?

[00:00:27] Chanchal: We, from our IT services days, we've known how to build software and we were very good at it, but we didn't know how to build product.

[00:00:35]

[00:00:39] Rahul: Welcome back to Understanding VC. I'm your host Rahul. Understanding VC is a perpetual MBA on a single subject, venture capital. And today I'll be having an in depth conversation on India US SaaS Corridor with Chanchal Purani. Chanchal is a VP at Westbridge Capital and focuses on US India enterprise software investments from the Silicon Valley office.

[00:00:58] Rahul: And Westbridge Capital is a multi [00:01:00] stage investment firm with approximately 8 billion in evergreen capital. Also, one quick note. Are you looking to refresh your digital presence? Digital Prism, the Singapore based digital transformation expert sponsoring this episode, has a fantastic offer. First 10 listeners to contact them get 20 free consultation hours.

[00:01:18] Rahul: Just mention Rahul Senthil. And also learn more from the link in the show notes. Now let's talk to Chanchal.

[00:01:25] Rahul: Hi, Chanchal. Thank you so much for joining me today.

[00:01:28] Chanchal: Thank you for having me, Rahul.

[00:01:30] Rahul: So, our topic of discussion today is India US SaaS Corridor. So how would you define, India US SaaS Corridor?

[00:01:39] Chanchal: That's an interesting question, right? The way I think about US India SaaS corridor is, companies being built from India, for the world, technically for the world, because why would you build only for one market, right? but given US is the biggest software market by a margin, uh, it largely [00:02:00] becomes that you.

[00:02:02] Chanchal: A building from India for us and, and by extension for the world.that's how I define, uh, us, India, SAS Corridor. We are starting to see more and more companies, uh, in the, in the corridor. And I invested in that space.

[00:02:17] Rahul: why is this interesting?

[00:02:18] Chanchal: So, different people find it interesting for different reasons. Uh, for me, it's been, you know, I grew up in India. I worked in India in tech for five years after, after school. But, and I was in the, you know, the hottest start some of the hottest startups, in the country, but we always looked up to the U S, the Silicon Valley as the Mecca of tech, that this is where, the innovation is happening.

[00:02:44] Chanchal: And that innovation is happening because it's funded by the market, that the, you can, Afford to invest in, in innovation because you, you know, that you can, uh, you can then sell it later if this market [00:03:00] was not very accessible to us, uh, outside of software, if you want to build a consumer brand, it's hard to bend it from India for the U S uh, but software has this unique power or unique, Access where you can build it anywhere in the world, you could be sitting in a small town with just a laptop only person.

[00:03:19] Chanchal: If you can build a good software, it can it can be for the world. So that opened up that entire market for us to be able to have been built from India while I moved to the U. S. I, you know, all of it. Noticed, uh, the first to notice that trend, uh, there are a lot of people already operating in the space, but then you that's when you start to see that what there are certain structural advantages of building software from India that we can talk about.

[00:03:49] Chanchal: but that's it. And then you try to figure out how do we exploit those structural advantages to build for this, um. This large economy, the large market [00:04:00] of software in the U S. I mean, that's, what's really interesting and exciting to me. I do believe that India has a lot of advantages to be operating there.

[00:04:07] Rahul: Yeah. What are these structural advantages?

[00:04:13] Chanchal: I think the biggest one and the most talked about is it's just the number of software developers that we have, right? India today is the largest number of. Software developers and largest numbers of also open source contributors, etc.

[00:04:29] Chanchal: We've been building softwarefor so many years, thanks to IT services, we have really high number of talents. We can argue about the quality of the talent. but if you just look at the share number and, uh, if you're not talking about the cutting edge innovation, we just have that advantage.but why is that number interesting and why does it matter? It matters because when you are starting. a new company, how easy or hard it is for you to [00:05:00] hire developers, how competitive it is to hire developers. While we talk about a lot of competition, in Bangalore, now in hiring developers, I think if you just look at the broader country, if you don't restrict yourself to certain geographies,we do have access to that, resource a lot more easily.

[00:05:15] Chanchal: And then number two, that resources is a lot more affordable. And again, why does that matter? It's not just because you can build it cheap, but because for the same amount of money, you can have a lot more developers and that allows you to just have a lot high product velocity, which is, which is an advantage that not many geographies can afford, not just, the U S but even if you were building from Europe or Israel, for example.

[00:05:47] Chanchal: the talent there is expensive because it's just not that easily available. And, when you are building zero to one speed of product development really matters. And, customers do take note of how fast, are you iterating? [00:06:00] How fast are you shipping out new features? So I think that's the one big advantage, that, India affords when it comes to software development.

[00:06:10] Chanchal: I think the second advantage is just that, it's a community. When you feel like as a country, as a geography, you're coming in from behind, everyone wants to help each other, and you don't have to make your own mistakes. you can, people are very, very, the community has gotten very strong.

[00:06:26] Chanchal: people are very open to sharing their own mistakes. And so you learn from other's mistakes and, and just move forward faster.it's, it's a little less talked about advantage, but I see it as a, as a very structural advantage. Uh, would that continue to be 20 years later? I'm not sure. But right now, because the community is relatively small.

[00:06:46] Chanchal: and we all feel that we want to take the country forward. in SAS, we want our country to make a name. that community is very strong and very open to sharing.

[00:06:56] Rahul: Yeah. I mean, so I had, I asked this question to [00:07:00] Sebastian Malaby, who wrote the, the power law on this podcast. This was his answer,on Silicon Valley the culture in Silicon Valley is that people don't just work for themselves. They work for Silicon Valley.

[00:07:12] Rahul: So there's always that, uh, uh, helping pay forward sort of mentality. Uh, I think, I think, uh, with people like Avinash Raghava, yeah, we also are starting to have that sort of mindset, in India.

[00:07:27] Rahul: I always think we need as many Avinash's as, capital VC and other things.

[00:07:33] Chanchal: No, maybe more, uh, even, uh, you know, capital, I think they play their own roles, but I think, especially in the early days, the support from the community makes a lot more of a difference.

[00:07:47] Rahul: Sheer number, uh, the community, anything else?

[00:07:52] Chanchal: I think, the third thing, which is not a structural advantage, just a trend that has happened is that. We, [00:08:00] from our IT services days, we've known how to build software and we were very good at it, but we didn't know how to build product. And there's a difference, right? You, you were told what to build and you could just go build it, but building that intuition for product, That as a, as a community, we've gotten stronger about thanks to the likes of Soho, which started way back then billion dollar company, uh, growing 30 percent or so, even in this, this environment, with no, no VC capital haven't gone in, but the, the people who were at Soho or Freshworks, uh, They've built a sense for how to build product.

[00:08:39] Chanchal: So that's another muscle that we've developed now. There are a few other things that we need to, need to build to be, uh, to be even more successful, but as a community, so that's a, that's a new muscle that we've built, and that's working for our, to our,advantage now.

[00:08:54] Rahul: Yeah, yeah, I think, I guess the, the rest of the muscle that need to be built [00:09:00] is like go to market, branding, um, design. These are all things with less experience.yeah, so, I mean, I already know. What is the answer? You, what are the key factors you think, uh, that contributed to rise of this? the experience with IT services is definitely one.

[00:09:19] Rahul: and also the talent.anything else that, that you think led to this?

[00:09:25] Chanchal: Yeah, I think that, some of the early, having early role models, right, the, if you see for in any geography, any geopolitical region, any industry, you need first few winners. Uh, and at that time, not many people are attempting it because you do not see success. But once you see some people be successful, there are a lot more people trying to do operate in that space and operate with a lot more confident.

[00:09:54] Chanchal: So it's like 4 minute miles. 1 seemed impossible for human race, but once 1 person. [00:10:00] Did it then just within a year or so many more people were able to do it. Right. So it seems possible. It seems possible to build a global software company from India. so the likes of Zoho, I, you know, give them a lot of credit, uh, for, uh, but the way they built it, but, but Freshworks and, and some other early ICERT is, or some other early companies, became the role model. Both from, you know, that this is possible, but also then creating a playbook of how to do it. From India. Um, again, sometimes we try to overfit what these guys, these companies did. Everybody tries to emulate and that, that can become a problem because the same model doesn't work for,all types of software, but, uh, they did create a playbook and secondly, the talent that we had software talent, but, as we talked about, you know, the talent that was in these companies knew how to build it, they saw it, they were a part of that journey.

[00:10:53] Chanchal: and that. A created that skill set in them, but also a little more aspiration to be like, I can [00:11:00] do this. I can build it. So you, you see a lot of, you know, Chennai mafia, Freshworks mafia, Zoho mafia, uh, you know, and Chennai is actually churning out so many more software companies than Bangalore, for example, today.

[00:11:13] Chanchal: So I think that, uh, that has led to the rise. And the third thing is just, VC dollars, right? Um, for any ecosystem, to get developed, you need the capital. And just the percent of VC capital that's gone in software as part of the overall, capital going in, in, tech companies, it just continues to continue to increase because we're, as you see more success, you see more dollars going in, into it.

[00:11:39] Chanchal: Uh, so all three, these three, four things I've let, I think led to, to the rise of India SaaS.

[00:11:46] Rahul: What is the unique advantage that we have? I mean, we talked about, uh, building a sustainable SaaS business. It's not just building the product, right? So, what are the unique advantages that we have [00:12:00] that makes you think that, okay, we can compete in the U.

[00:12:03] Rahul: S.?

[00:12:04] Chanchal: See, we have been competing in the U S well, for the same reasons, right? Uh, as I think one thing we didn't talk about, we have cheaper talent available. We have, uh, a lot more of that talent available, so we can build that product fast. Um, the third thing is, um, then you can offer it at a lot cheaper price, right? in the U S you have, Talk about Salesforce, right? It was a very easy to use software today. No, like apart from some of the largest enterprises don't want to use Salesforce because it's just become expensive, not just from the per license price, but just the total cost of ownership.

[00:12:46] Chanchal: Right? The amount of time and money that it takes to implement Salesforce and then maintain Salesforce. And then training your employees, the employees are not that willing to, to continue to use Salesforce, right? So you've seen [00:13:00] the rise of, HubSpot or Freshworks, um, in, in different spaces trying to compete.

[00:13:07] Chanchal: So you can build a software that's cheaper. think one advantage being away from the market, while there are a lot of disadvantages of being away from building a software for a market while you're away from it. but one advantage it affords you is that it forces you to think more first principle. You are not as impacted by how things have always been done. So you can take a fresh look at, uh, attempting the same problem. So if you think about procurement, right. as an industry, um, Coupa was started to replace.to be a better version of SAP, uh, Ariba and, and the likes it's now become that bloated company that, you know, it's become the, the company that it was supposed to replace essentially.

[00:13:58] Chanchal: Now you need, [00:14:00] uh, and need other people coming in to, to build a, an easier version of Coupa, but obviously the market has to be large enough that, that even if you're building For just SMB and BitMarket, you can still be a big enough company. but also then you need people taking a fresh take. The way procurement software has been built has always been built from the perspective of a, uh, of a procurement administrator, right?

[00:14:23] Chanchal: Uh, people in the procurement team. Would you not thought of, we're seeing increasingly more Indian companies coming in and thinking about it. From the business user's perspective, which I haven't seen being, you know, that the, the way software is built in the space was never built from the business user's perspective, but you're, when you're away from it, you can think about it.

[00:14:43] Rahul: so capital efficiency, right? So, um, I mean, over the years in the last 10, 15 years, the cost of building, uh, a product has also dramatically gone down in terms of the cloud infrastructure and everything [00:15:00] else. Right? Do you think this will continue to be the case? As in, like, we will not have that advantage for long, right?

[00:15:10] Chanchal: We would, I feel we would, because that this will reduce because sure cloud and all of that is, or even automation AI. Would reduce the advantage to some extent. I don't think that'll go away because you would still need people to do something, some more things, right? So that people, advantage will continue to be, I think there are also areas beyond R and D where you can exploit this, cost arbitrage, right?

[00:15:38] Chanchal: You can have a lot of your GTM team sitting out of India. Right. You can have a lot of your product marketing team sitting out of India. So it just doesn't have to be R and D. your inside sales. we've, we've, some of the companies in the space have shown that that model works. You can have teams sitting out of India.

[00:15:59] Chanchal: Doing, running [00:16:00] inside sales motions, you can have your, VDRs, SDRs sitting out of India, making calls, doing demos, et cetera. And it, it works. It may not be per person basis as efficient as it would be when you're in the same geography, in the same time zone, but still the advantages, are significant today.

[00:16:16] Rahul: So, um, despite all this, what, what do you think are some of the challenges, facing Indian companies then when they, when they are targeting the U. S. market?

[00:16:27] Chanchal: Yeah, I think the other side of that same coin that we talked about, it's like when you're away from the noise, you can, you can take a first principles approach. I think there are, there are a lot of disadvantages of it. When you're not in the market, you don't understand. You may not understand the nuance of the, of the market.

[00:16:45] Chanchal: You may not understand the needs of the users. Right? Uh, for example, just the software preference, the UI UX preference changes by region a lot. Okay. Uh, the software that we feel comfortable with, the [00:17:00] UI, we feel comfortable with very different and how, what you would see, in East Asia versus Europe and or just Western markets.

[00:17:06] Chanchal: I think Europe and US have have largely similar preferences there. Um, so just understanding the specific need, the even understanding workflows is hard from a distance. Uh, so that's 1. I think then, um. Building a brand is just not easy. I think we can sometime lean too much into, you know, this is a cheap software, cheaper software being built in India.

[00:17:31] Chanchal: There is a, um, some bias in the U S when you look, when they look at a company being built from India. But I think sometimes we also lean too much into it. If you're building a, let's say a cheaper version of software, it may, uh, say sales software, CRM software, uh, Salesforce, it makes sense to advertise a brand yourself as that.

[00:17:53] Chanchal: But if you are building a premium product and we do have companies building that way, then you don't need to lean into that,[00:18:00] that access of the, you know, you are, you're a cheaper software being built out of India. Maybe I mean, very few Indian companies that can, that have, felt confident enough to price their product more expensive than the U S counterparts.

[00:18:14] Chanchal: And you can, if you, if you feel, your software does add that, that sort of value. So I think we need to figure out how do we brand ourselves in the right way. there are a category of software we have learned to brand. The other ones we need to, we need to crack.and on the same axis, I think just generally figuring out the GTM, it's hard for everybody, no matter where you're building it from.

[00:18:37] Chanchal: But, if let's say you are a founder who has spent most of the time in India. And of course, to build in the U. S. you have to sell in the U. S. One of the founders has to spend time in the U. S., if not move fully. And then you need to hire a sales team. And that is one of the hardest challenges. I was surprised of course. Two [00:19:00] reasons, because you're usually we see a lot more technical founders, the building software companies. So you've probably not done sales yourself. So you, A, you don't know what you're looking for. B, you're trying to, to hire someone with a very different, in a very different context. Right? So you don't know how to evaluate them.

[00:19:18] Chanchal: Specifically, right? Some, how there is a difference in, in the way you evaluate men and women, because men show confidence in a certain way and women show confidence in a different way. So you need to be educated so that you don't, you don't put a certain gender at a disadvantage. Similarly, how do you evaluate a candidate from, uh, in a different region?

[00:19:39] Chanchal: Is this hard? So I think hiring a sales team is extremely, extremely hard. And of course, you have to be even better at being able to convince, convince strong candidates to join you, right? Um, because They don't know you, uh, you may, or they know you less off, [00:20:00] right? They know you may be a very popular company in India because you're building there, you're, as a founder, based on what you've done, uh, your pedigree, all of that would have would have just less recognition amongst most of the talent.

[00:20:14] Chanchal: So just convincing good talent to join you as hard. I think finally, just cultural integration between two geographies is, is not as much as talked about as much. but if you want to create one team, that, that's operating in two regions, and especially India and US, which are on two, two very different extremes, that cultural integration, would be really important.

[00:20:33] Chanchal: Is one of the harder problems to solve.

[00:20:36] Rahul: Yeah. No, the one thing that I really like about people from the U. S. are they're really good at selling themselves. And the thing with salespeople is that Yeah, they sell themselves really well. So then it's hard to judge.

[00:20:49] Chanchal: right, right, yeah,

[00:20:52] Rahul: Yeah. so you mentioned that, you know, the product experience expectation and [00:21:00] might be different, um, from what a customer expects in India and in the U S that means it's like finding product market fit all over again, I guess.

[00:21:09] Chanchal: yeah. And that's where you see companies struggle or take a couple of years, to just find that product market fit again.

[00:21:18] Rahul: Yeah. That is also a struggle. Hiring a salesperson is also a struggle and expensive. All these are very time consuming and expensive, right? Um, and then as a VC, do you expect, um, uh, a SaaS business to already have figured out all this before you invest or you're willing to invest for them to expand that it's usually you have to show some sort of. early customer interest

[00:21:48] Chanchal: Yeah, I think it depends on, you know, what stage you do you invest in. If you're a seed stage investor, you can't expect a company being built out of India to have already, uh, Show on [00:22:00] product market fit in the US, right? But if you're a series B, series C investor, you may have that expectation. I think that changes by by stages.

[00:22:09] Chanchal: It's always good to show some traction. In the U S it just makes fundraise a lot more easier, but it's not always possible. Uh, in fact, it also changes by just the nature of software that you're building. There are companies who grow to be a 10 million ARR business in India before they think about coming to the U S right.

[00:22:31] Chanchal: So, uh, there you are underwriting when you're investing in them, some different things, versus their companies who, Who come to the U. S. as soon as they are a million dollars in revenue in India, or even even smaller. And that's also a function of how big a market you have for that specific software available in India, right?

[00:22:49] Chanchal: And then they are also, you know, they're not many companies that. Well, just for India, but we do have a couple of companies in our portfolio, where just the India software market is large [00:23:00] enough that they are not going to think about us anytime soon. And it's just going to continue to sell in India for a long time.

[00:23:07] Rahul: And, what would you recommend? so the recommendation would be based on the sort of industry they're operating in.

[00:23:13] Chanchal: Industry you're in.

[00:23:15] Rahul: you mentioned, a company with 10 million ARR and 1 million ARR. At what point would you decide, to target US market?

[00:23:24] Chanchal: I think there's no, again, no one answer that fits all.but I would say take a, you know, it's a function of ROI, right? You, if you continue, let's say you're at a million dollar area and now you're thinking, well, do I continue to spend time here or do I go to the US? Uh, when you're going to the U.

[00:23:45] Chanchal: S., you are going to have to change your product a bit. You are going to have to do user research again, assuming the initial product that you're building. You're not from day zero building for U. S., right? Uh, some companies do do that too, but here I'm assuming that's not [00:24:00] the case. Now you're building, you have to spend time doing that.

[00:24:04] Chanchal: You have to spend time, in market discovery, in hiring the sales and sales and GTM teams, generally building a brand, all of that, that's going to take time before it starts to, show you results. and the other approach could be that I continue to sell in India, continue to focus here and have a very small part of my, business.

[00:24:22] Chanchal: overall effort going into, uh, understanding U. S. market or changing my product, for the U. S. a little bit.but then you can only do that when you have access to the market in India. The market has to be large enough. The market has to have some white space, um, Sitting in, it'll be a function of what you can do.

[00:24:41] Chanchal: If you see a lot of market available in India, you can just grow to 10 million ARR. You're a much bigger company. You can, uh, Uh, you can raise a lot more capital so that when you're thinking about then building, selling to the US, you can hire a lot more people. You just have a lot more resources to tackle that market because sometimes, you, you figure [00:25:00] out USVMF at once, it might take, take you a couple of attempts to figure that out, uh, both.

[00:25:05] Chanchal: in getting the product, uh, figured out and then also GTM, fit, right? It, it takes some iterations to figure out what the right ICP is, what the right GTM is. And when you stay longer in India, you can also get a better sense of your ICP. while you would still need to figure out what that is for, for the U.

[00:25:24] Chanchal: S., but you, you start to get. A little get incrementally better at identifying it.

[00:25:30] Rahul: Yeah. And go to market strategy, right? Like, uh, what is the right approach here? Just looking at what, the companies before you have done, from India, that means maybe looking at what Freshwork has done or does it always, you know,change too fast to a point where you have to still adapt?

[00:25:50] Chanchal: Yeah, I think that's where I feel we have overdone in copying some of the successful companies. You know, we are investors in Freshworks. I love the company. [00:26:00] Uh, we have a lot of respect for what they've achieved.but I think, on the flip side of it, we see a lot more companies trying to have the same GTM approach. Which doesn't work for everybody. That approach works for, for Freshworks because of the nature of the market they are in, the kind of, um, users they're going after. They are purely, you know, they started as purely SMB focused company. And then now with newer products, they're, they're becoming more mid market and even lower enterprise companies.

[00:26:31] Chanchal: GTM strategy now significantly, right? Um, Uh, well, we don't see that you just see how they did things back in the day and try to replicate that one of the other disappointments in GTM strategies. I've had with India is. It's just how we've not learned to do PLG well, the only handful of companies that have done well, especially because, you know, build, building software, building product is our key strength.[00:27:00]

[00:27:00] Chanchal: I would have expected a lot more, uh, PLG first companies, from India.

[00:27:06] Rahul: Yeah. I've heard that doesn't work, after an initial point. I don't know much, but yeah. Does it work?

[00:27:14] Chanchal: it's true that, you know, beyond a certain point, when you want to target large enterprises, it's hard to do it with PLG. And you can't build a billion dollar, typically can't build a billion dollar business. Just with PLG. but it doesn't mean that it doesn't, it can, you can't build a, tens of millions of dollars of business or even a hundred million dollar business, but just PLG, depending upon the market you are in, you can, and, I think for any company, uh, it's hard to be selling to enterprises on day zero because you need a lot better built out product to simply, or have a brand or have, you know, um, Customer testimonials to, to be selling to larger enterprises in that journey, you can leverage PLG a lot more, you know, at least he gave us the [00:28:00] example of what can you do, how big a business can you build sitting out of Australia, in the U S and, and, rest of the Western world.

[00:28:07] Chanchal: So. And it's been a while since they did that. We have a lot of lessons and a lot more companies after that have done that.

[00:28:15] Rahul: considering all these challenges, what are some of the sort of strategies that you've seen? Um, I think we can talk about both, maybe, finding product market fit in the US market and also, uh, go to market and also hiring and, yeah, what, what would be your suggestions as well?

[00:28:33] Chanchal: I know. I'll just say that I know little, not, you know, so there are other people in the industry who've spent a lot more time in this space and can add a lot more, value to your question, but, uh, I'll give it a shot. So I think when it comes to product market fit, one of the biggest advantage is.

[00:28:51] Chanchal: It's just get one of the founders to move to the U. S. as soon as possible, right? Uh, it can be daunting if you have not spent any time in the U. [00:29:00] S. It can be really expensive, uh, uh, depending upon, your personal life. If you're family, kids, it can be really hard. Uh, but there is no other way to do it well.

[00:29:12] Chanchal: If you want to understand the users, you have to just spend a lot more time in the, in the region. Right? Uh, I think that likes of sass for me are doing, doing a really good job of making that transition easier for founders, giving them that community. They're like questions like, which area should I stay in?

[00:29:30] Chanchal: Uh, which school should my kids go to? When, how do I figure out the food situation? I don't have time to cook. Right? So, uh, questions like that. Uh, it can be a lot, but I think, uh, if you want to crack the U. S. market, just get your product founder. To move to the US as soon as possible. And preferably if you can afford to get your, product leaders, some of the, you know, senior product folks, if not engineering as well, to also move to the US or just spend a lot more time in the us.

[00:29:58] Chanchal: and talk to a [00:30:00] lot of customers. I think, we tend to have, we have it and everybody does, but especially, like I think as Indians, I'm, I'm generalizing a little bit here, but We just enjoy building the software process so much more, but we need to just be speaking to users a lot more, get out of the building, talk to, more people who are not like you, because in also in, uh, uh, it's a lot easier to find, Other Indians in the target companies and you end up talking to them a lot more.

[00:30:32] Chanchal: It's just because it's easier to get access to them. Your networks will likely lead you to them a lot more. But it's important to talk to more diversified set of users. On the GTM side, I think it's more about hiring. You have to understand the ICP. First, uh, so you've got to experiment a lot. And again, being in the geography really, really helps.

[00:30:53] Chanchal: so the faster you can narrow down your ICP, uh, the more [00:31:00] efficient and faster your sales becomes. Uh, we've seen companies even after three, four years of selling in the U. S. don't know what their real ICP is. We sometimes want to do everything, right? Like, So you would see some traction in many different user segments, but you've got to take a call off on which one do you want to target first.

[00:31:19] Chanchal: Uh, on hiring, I think that was, there's a biggest challenge, on how to hire first set of salespeople. Well, I think there we've seen success founders who've had success in is those who relied on mentors or, or advisors in, in making that hiring. So it's not something that you can learn. It's not a theoretical thing that someone goes, tells you, go look for these four signs, right?

[00:31:47] Chanchal: How do I look for these four signs? It's hard. So relying on your advisor network who spend time, in the US, to both help you connect to the right people. to interview and then help you also interview. [00:32:00] Uh, so for some of, for example, some of our portfolio companies, like Innovacer, for example, when they were coming to the U S, we connected them, to the founder of Aetna Health, which, which was classmate with, with our managing partner.

[00:32:13] Chanchal: And the way they were able to help Innovacer is very, very unique. We, we personally could not have had that added that kind of value, but, um, that person helped them hire their first set of salespeople. Right. So because he spent so much time in the industry, he knew exactly what to look for, he knew some of the good people's people in the industry for them to even, even be interviewed.

[00:32:37] Rahul: Yeah, any interesting tactics that you've come across, across these three things, GTM, uh, uh, hiring or identifying PM, uh, product market fit. I mean, this sounds like the general approach that everybody should sort of take, anything unique, that you've come across

[00:32:57] Chanchal: I've seen, uh, some [00:33:00] of the founders. Lean into a lot of the student ecosystem. Um, so we have a lot, a lot of Indian students coming to study in business schools, master undergrad, like all over.

[00:33:16] Chanchal: She leverage that network, which is across many different business schools, many different just, schools. And they are surrounded by a lot of diverse sort of people who come from many different industries. Uh, right. It's a very diverse, a captive audience that you have and, run large, like internship sort of programs, or even, uh, internship can be, can be competitive, but if you run for summer internships can be competitive, but if you run, uh, during the year part time sort of internships to collect just user feedback, right, uh, that can just get you a lot of responses very, very quickly.

[00:33:57] Chanchal: It is though secondhand, you are not getting [00:34:00] that directly. But then get that to get the volume of responses and then funnel it out and talk to the people. Uh, I've seen a couple of founders do that and I think, I thought that was really interesting and smart way of, with minimum resources, get a high volume of, use of feedback.

[00:34:17] Rahul: one, one other question. So if you're a founder, want to spend a couple of months in the US, what should I do with the health insurance? I know health, health insurance is expensive in the US.

[00:34:29] Chanchal: uh, I actually do not have a good, uh, answer to that. I, I'm sure that's a big question. I just have not, uh, thought about it myself. but if,

[00:34:44] Rahul: Actually, I was thinking about it.

[00:34:45] Chanchal: have a question as a founder, reach out to me offline, I'll figure this out and I'll get you the answer.

[00:34:53] Rahul: Yeah.

[00:34:54] Chanchal: And so you said you were thinking about it.

[00:34:55] Chanchal: You're thinking about moving to the US.

[00:34:57] Rahul: no, no, no, no, no. I was thinking if I had to come and stay in the [00:35:00] US for a couple of months, if something happens, what would I do? I know it's expensive. It's expensive.

[00:35:05] Chanchal: Yeah. If it's, if it's just for a couple of months, you can definitely all get, travel insurance. Yeah. Which is, which can be reasonably cheap as a student. I, you know, I got United health insurance through some other third party that made it very, very cheap and a lot more affordable, but I had the same coverage as United.

[00:35:27] Chanchal: Right? So there are, there are new startups like that. we have to do your research and make sure that, that those, those are good quality insurances, but something like that is, is available.

[00:35:38] Rahul: Yeah.

[00:35:39] Chanchal: if you hear longer, I don't know what the answer is.

[00:35:42] Rahul: So what sort of, companies, SAS companies from India, are interesting, interesting to you at the moment and why?

[00:35:49] Chanchal: I think my answer is, is not very, you know, at the moment, this is, this is the type of companies that I'm always interested in is the companies that are, [00:36:00] um, building anti hype. So, Spaces, traditional industries that have been least served by tech.just anyone that's, that's building for, for those industries.

[00:36:15] Chanchal: Like I, I used an example of procurement. Such a vast, vast,market. there's a lot of work that's been done in supply chain. A lot of companies operating there, but just the procurement piece of the supply chain is so underserved and it's huge, they control so much more spend. Uh, it's hard to build because you don't, it's not very intuitive.

[00:36:36] Chanchal: So you, if you've not been in this space or you, it's hard to have intuition, for the space, but anyone who's just building for, uh, These old school under, under invested by tech, industries, construction, for example, if you're building software for construction, you've seen how, how fast Procore Procore, grew, right.

[00:36:57] Chanchal: but there are a lot of other areas of [00:37:00] construction that are not, um, not as well served even today. Those are the companies that I'm really excited about. I like to see big market. Uh, especially companies that are being built from India. If you want to, if you're not going to be the number one player, or even number two player in a space, that's fine, as long as the space is big.

[00:37:22] Chanchal: Uh, and you, you need to then make sure that the space is really large. and then there is, if it is, and there's, there can be plenty of market in just mid-market and SMB. Um, so, uh, just go after them, build easier to use product. I always, always like that. Uh, there's always evolution of products, right?

[00:37:39] Chanchal: Um. Some of the companies that seem like industry benchmark today will become legacy over time. And so there's always need for newer and newer companies coming up in the same space, which might even seem competitive today. But, but that that's just a cycle that always happens. I think this secondly, there's a lot of obviously AI hype right now.[00:38:00]

[00:38:00] Chanchal: We like software companies. All software companies are AI companies. They've always had, most of them have had an angle of AI already. Always used to call them SaaS. We now call them AI.you know, a lot of, companies that we invested in that were primarily like intelligent conversational chatbot, we call them SaaS.

[00:38:18] Chanchal: Now we call them AI. Um, I think, um, in that,I'm not sure if we have any advantages in in the foundation or infrastructure layer India doing anything Indian companies haven't having an advantage building from India for the for the globe There is an opportunity there for, you know, using some of the things that have been done here to find applications for India that can be large, and that can be unique to India because of just the scale and the number of people we have, the unique, some of the unique dynamics of India. Those are the type of companies that I'm excited about right now.

[00:38:59] Rahul: [00:39:00] And, uh, so if, if, if, um, startup was looking to move to the U S, is looking to raise funds, What should their approach be? Or should they even raise, from a US VC?

[00:39:13] Chanchal: Yeah, I get asked this question a lot, actually, I get asked to make introductions because we do growth stage investing. I get asked for a lot of introductions to, um, early stage US investors. And I'm not sure that's always the right approach for a founder sitting in India, right? You don't want capital from the U.

[00:39:35] Chanchal: S. just because it's capital from the U. S., right? You need to see who is the, at a given point in time, what help do you need and who is in the right position to help you. For example, if you are, um, a seed stage company raising maybe series A, and then you want to go figure out U. S., product market fit. A U.

[00:39:56] Chanchal: S. VC may not be able to help you with this transition as [00:40:00] much. But you do want to, you do want someone who understands the U. S. market a little bit. So you see a lot of, uh, few venture firms and increasingly more now focusing on this U. S. India corridor who have arms in India and offices in the U. S. So they have teams that understand both, and Westbridge is just one such example.

[00:40:19] Chanchal: So, um, So maybe raising from them can be helpful so that they understand your India context to begin. They've seen a lot of founders go through this journey. They can introduce you to a lot more founders like that, but while also being able to help you, uh, crack this market. Uh, but let's say if you were raising a seed round and you know, you're going to first try out your product in India, for, before you get to your CDC.

[00:40:45] Chanchal: I don't, there may not be as much value in raising from raising from a USVC. And in fact, uh, you know, in last couple of years, we've seen the India market actually [00:41:00] doing a lot better than the US market. So, it's not always that the USVC will give you a better valuation or better overall, better terms. I've in fact seen, uh, on the contrary, in the last couple of days, you're able to get a lot more attention, because we are, we are still a smaller community. From investors and, and also like how much time are they willing to spend on you if you, uh, if you raise, a small check from, from a US VC, which has a lot of companies, or how much resources are they willing to spend on you?

[00:41:36] Chanchal: How much time from the partner that, uh, that you're going to get versus, you know, an India equivalent of that fund. So those are all the factors to think about. Uh, but if you do think of figure out that that you want to raise from from someone in the US and if you haven't personally spend as much time or don't have that much network, I think this US India corridor, uh, [00:42:00] investors are, a good starting point.

[00:42:02] Rahul: Okay. So.for the same folks, right? Besides leveraging the existing investor, to help with everything in the us in terms of hiring and go to market strategy and everything else. What, what are the other, I mean, what should be the strategy, for a founder in 2024? you just mentioned, leveraging the India, us, SaaS corridor.

[00:42:24] Rahul: so you're looking for strategies for fundraisers So, to do anything, if you have not been in U. S. at all, either as like a student or you've never worked in the U. S., it's quite hard to build a relationship, just about for anything, right?

[00:42:40] Chanchal: yeah. I think India SAS Corridor is a good starting point. But just generally, at least in the valley, just India network, right? People with any India nexus, uh, are, there are plenty of us. You can get to literally any company with, [00:43:00] through just that network, right? So, and you'll see more, uh, willingness to help out.

[00:43:05] Chanchal: You will be able to get, have better reach to them, uh, through a warm introduction. Uh, because. It's still, uh, and I'm not talking about U. S., India, SAS Corridor, right? I'm just talking about people who were first generation, second generation Indians, or people who've been in the U. S. for 20, 30 years, not even in SAS, you want to sell to, uh, Say a B2C company, you will find plenty of Indians, uh, there in tech role, especially, and you will have some sort of connect to them.

[00:43:40] Chanchal: If not, if not second degree, maybe third or fourth degree, but even, even if you write to them cold, you're a lot likely to hear back from them faster, um, than usual. So I, I would go at that. If you look at the CIOs, for example, There's just disproportionately large numbers of, Indian [00:44:00] CIOs today in even the largest companies, right?

[00:44:03] Chanchal: So if you want to say, for example, sell, sell something to a GM, uh, I don't know who their CIO right now is, but, you know, you're just likely to find an in a lot easy in the, even to the highest level. So today, now you're increasingly see when seeing, we are seeing more and more Indian CEOs come up, but that's usually not where you want to start from, but you would see heads of products, a lot of these, uh.

[00:44:27] Chanchal: Uh, from India origin. I think that's, that's a good, very good starting point, even if they're not very involved in the U. S. India ecosystem, you can just get to them, a lot easily with cold outreach outreach as well.

[00:44:38] Rahul: And looking ahead, like, how do you see this India US SaaS Corridor evolving over time?

[00:44:44] Chanchal: Yeah, I, I feel like we are still in the very early days of this corridor evolution. We've seen, uh, a few successes, uh, but. This is an exponential journey, right? Uh, uh, the number of [00:45:00] companies, uh. We saw in the space last year.exponentially more than a company you saw maybe two, even two years ago. Right.

[00:45:10] Chanchal: Um, Yeah, we're getting sophisticated. We are increasing in numbers. We are learning to bridge the gaps as the communities is growing. Uh, we have, more people to learn from. I think,and as it's a, it's a flywheel, right? You've more companies coming up, more people from those companies. Well, we'll start, um, start building software.

[00:45:39] Chanchal: Uh, we know how to leverage our strengths well. So I think this, this corridor is just going to expand more and more. There are more and more VC dollars that are going to go in this space. Um, it's a really good time to be in this space if you're a founder thinking about, you know, whether to take that, leap of faith, I think, uh, now is a, is a really good time, [00:46:00] even though macro might not look as exciting, but for an early stage founder, zero to one, uh, Not the best macro is actually the best time to, to start.

[00:46:11] Rahul: Yeah. So, I mean, the US market, enterprise market, everybody knows is the largest. So, isn't this what everybody else is also thinking? Everyone in Europe, Israel, just about anywhere. Yeah. People in Singapore.

[00:46:27] Chanchal: Yeah. Yeah. I, uh, everyone's thinking that and, uh, everyone is taking a crack at it. So you're not the only geography trying, uh, trying a stab at it. I think though some of the structural advantages that we talked about are unique to India. Even in Israel, talent is really expensive and they are a number of people.

[00:46:49] Chanchal: Why is a lot smaller country, right? So we just have a lot more number of talent, a quantity of talent and and just [00:47:00] affordability of talent is really high for us. And as we've talked about, you know. the strength in numbers. So there's just a number of companies that have that come out of India are going to be a lot higher than they come out from any other region.

[00:47:14] Chanchal: Having said that, I think, Israel US ecosystem has done some of the things a lot better that we need to learn from. Right? They are ahead of us. I believe today in terms of just innovation. Um, and, um, We, we have, I wouldn't say we don't have that quality of talent. It's just the ecosystem is such that we are not operating in that top.

[00:47:37] Chanchal: Usually, right. There are still some exceptions. We have some, a bunch of deep tech companies being built out of India, but I think it's done a better job than us in that, uh, similarly, they've done a lot better job in, in branding and GTM than us, right? But that's also that, that corridor started to evolve before us, India SAS Corridor [00:48:00] started to work.

[00:48:00] Chanchal: So they have a headstart, which is a good thing for us in terms of, we can just learn from them. Right. So that's a good place to learn from how those companies have cracked. But, uh, to answer your question, yeah, I know we are not unique, uh, in, in knowing about this space. Uh, we do have some advantages, uh, that we need to lean into and exploit them to make a difference over the other geographies.

[00:48:24] Rahul: Yeah, and also get good at, uh, areas where you're weak at, right? Like similarly, I mean, 10 15 years ago, we did not know how to build a product. Now, yeah, getting there sort of thing. and you know, what would happen in the future in the India US SaaS corridor that will make you go wow?

[00:48:45] Chanchal: I think I'm already there. , uh, maybe a, a biased answer because I operate in that space. But there's a reason I chose to operate in this space, right? Like I moved to the US thinking I wanna be in the valley. [00:49:00] and when I came here, uh, I left India to come to the US thinking I wanna be in the area, I want to be in the US ecosystem.

[00:49:07] Chanchal: But when I came here, I saw the disproportionate advantage. This US India software corridor specifically had. That, even while being here, I, I want to operate in U. S. India. I want to, uh, you know, not be like, uh, uh, I just want to be in the Valley, interact only with Valley only companies or things like that.

[00:49:27] Chanchal: I, I'm really very keen to see a couple more like large, at least, you know, Canva like companies, uh, PLG companies coming out of India. Maybe that's, this is just the PM in me speaking. Uh, I think you need strong product managers and just strong engineering capabilities to, uh, to get to PLG success, understand users, such things.

[00:49:55] Chanchal: And then being able to trans transition what they need, uh, via your [00:50:00] product. So, yeah, that, that will make me go, wow, even more, but I'm already pretty excited about this space. It's just a function of now, you know, put, giving it time to evolve over time.

[00:50:14] Rahul: Yeah, yeah, this was great. Uh, thank you so much, uh, for taking the time to do this.

[00:50:20] Chanchal: Thank you for having me, Rahul. This was fun.