India is winning. . .

I'm in the midst of a trip to India to identify some partners for F1000 client engagements and Solstice's internal development projects. My initial reactions below. . .


The growth here is electric. It’s evident in the dynamics of the construction going on at every turn, the fast paced movement of folks on foot, bikes, rickshaws and cars, and in the eyes of everyone I have met. People living here are genuinely excited about what is going on in India and they are extremely proud to be a part of it. I imagine this is what the 50s might have felt like for our grand parents before we started getting used to our prosperity.

Outside of the genuine excitement, here are some things that have really stood out to me:

There is a ridiculous amount of people. I knew this coming in but you have to see it to believe it. Roads are packed with traffic, which by contrast, moves pretty quickly because no one stops for stoplights, pedestrians, etc. Driving on the roads is almost comical. Lane lines are generally ignored, vehicles are constantly cutting each other off and these little three wheeled motorized rickshaws (Indian taxi cabs) are like bees buzzing in and out of cars. Every car has little dents and dings from bumping into other cars. No one stops if this happens. It’s like a video game.

The large population has had a really interesting effect on the economy. First of all, labor is crazy cheap. One of my old Accenture colleagues, Gautam, and his wife have three full time “servants”, a cook, a maid and a driver. The maid cleans the entire apartment top to bottom every day and does the laundry daily. The cook prepares three fresh homemade meals (and smoothies and snacks) every day. The driver waits outside all day in case they might want to go somewhere. He then drives them and waits for them to be finished. This could be a ½ hour stop at the store or 8 hours at work. In my opinion, the driver is completely justified because I would last about 5 minutes on the streets before getting crushed. The combination of the three salaries costs under $500/month. Imagine that, $6K a year and you don’t have to do anything ever again. This also demonstrates the large disparity in income between the classes. The other impact of the population density is real estate prices are ridiculous. Gautam’s modest 2 bedroom apartment (about 1300 sq ft) is worth over $1,000,000 US. The prices easily rival any large US city. Since real estate is so expensive, and salaries are so cheap, people often live with their extended families for a long time. Products aren’t necessarily cheaper either, due to the high demand, while service labor is. For example, I got a couple work shirts tailor made. It cost me $45, $42 of which was for the material, $3 to have a tailor custom make it.

The hotels are interesting. Due to the heavy business traffic the nice hotels all sell out and go for between $300-$500 a night. They are awesome though. The next tier down however is Red Roof Inn style. There are no “mid range” hotels. There is a business opportunity here if anyone knows anything about starting hotels.

The food is fantastic, if you like Indian food. Their attempt at sandwiches is weak, gross actually. But the traditional Indian food I’ve had has been spectacular. Some of the best lamb and chicken dishes I’ve ever had. Funny story: last night I ate at a famous southern Indian restaurant in Chennai with a local potential business partner, Paddy. This older Indian man walked in and the whole place stopped, I mean every conversation, every movement just stopped as he walked by and sat down. I asked my colleague who he was. “He’s the Indian Robert Dinero. Probably one of the most famous guys in India!” India has the second largest film making industry in the world, next to Hollywood. In fact, they call it Bollywood. I encouraged Paddy to take a picture of him with his camera phone. Indian Dinero (his real name's Rajinikanth b.t.w.) saw him and he held up the camera to ask if it was OK to take his picture. He waved us over! We walked over to his table and Paddy said “I was just explaining to my American friend that you’re the Indian Robert Dinero”. The guy laughed and gestured for us to sit down next to him for a picture. Paddy offered for me to sit down for the picture first and Indian Dinero said, no not the American! He doesn’t even know who I am! Let him take the picture!” Pretty funny. He’s right though. I still don’t know who the hell he is. Got a picture of him and Paddy though and Gautam is very jealous.

The airports are very convenient and highly secure. You have to show an itinerary just to walk in the door. You scan your bag before you go to the ticket counter. The lines are all short. You’re in and out in 2 minutes. The security check points are funny. Since product is expensive and labor is cheap, there are a bunch of dudes with hand scanners that do the scanning (vs. the electronic doorways you walk through). There are no jetways. All the gates are right in the front and to get to your plane you hop on a bus and it drives you over. This means less walking actually and you’re more likely to make your flight if you get to the airport a ½ hour before flight time (I tested this today). Tickets are also cheap. You can get to anywhere in the country for $100.

The planes are awesome. I’ve flown Kingfischer airlines twice and it’s my favorite. Every plane was brand new. Kingfischer was started by the guy who started Kingfisher Beer (Indian beer). He is the Indian Richard Branson apparently. He got pissed at some airline two years ago and so decided to start his own airline. There is satellite TV in every seat and every flight attendant is hand picked by him. Coincidentally, they are all gorgeous. Really, I mean it, like model gorgeous. Of course it’s my favorite airline because of the satellite TV (that’s for Gina).

I visited four different potential partners yesterday. One was a smaller startup of really smart software engineers, one was essentially a sweat shop (20 programmers packed in a 12x12 room, a very hot room) and the other two were large publicly traded companies. I’m really glad I came because on paper, the first two firms looked the same and visiting their development center proved they were very, very different. After visiting these firms there are three major things I’ve determined. 1) All application development will eventually be over here. They’re not ready for it all yet, but they are coming up the learning curve fast and eventually will surpass the purely domestic US firms. In some ways, they already have as some of their CMM processes force them to focus on continuous improvement. As collaboration software continues to improve and software development tools continue to mature, this will become more and more of a reality. In ten years I’ll be surprised if there is any application development happening in the US. Probably on the same scale as the amount textile manufacturing that’s occurring in the US (i.e. very little). 2) Their growth is constrained by sales. These guys can build stuff until the cows come home but they don’t have the people to sell it. As I was listening to their sales pitches I was giving them suggestions on how they could improve the delivery of their value proposition. With the big guys, discussions on how we can engage them as a partner turned to discussions on them acquiring us. I don't feel this makes sense yet. What is contagious is there excitement and passion for delivery. Their portfolios are impressive as well. They are building some very cool stuff and are just as engaged in embracing emerging technologies as we are, probably more so because there passion for learning is thriving. There project management processes are also improving. They’re all talking Agile, which I found very inspiring. Finally 3) Since they are so far removed from the business users, they are going to have a hard time building strategic technology (i.e. EA), product management/deep business analysis or management consulting practices. This is where the future and opportunity lies for boutique consulting firms (i.e. Solstice). Offshore firms are going to have to either partner or inorganically acquire this talent, but those roles will remain in the US (or wherever the business is). Just like the clothing industry, the clothes may be made in China, but they’re still designed in New York.

That’s all for now. I have some other things to share but will save that for a later date. All in all it’s been a great time and I’m looking forward to the rest of the trip.

Let me know your thoughts!

-J