On my recent trip to Bangalore, I ended up sharing a breakfast table with this fine Belgian gentleman. He works for a Belgian vegetable oil company and has been sourcing ingredients from India for more than 20 years.
Basically, he is the first Belgian I have ever spoken with in my entire life. On top of that, he is as far away from my world of US-India tech startups and venture capital as one can imagine. Being the collector of obtuse insights and mental models that I am, I started asking him questions about his experience and observations over 2 decades of coming here.
Here are some quick scribbles from the conversation that you might find interesting:
The first thing he mentioned was that he spends a lot of time sourcing from Hubli. During this trip, he was surprised to see a startup incubator on one of the local roads.
Even as someone who spends a lot of on-ground time covering the Indian startup ecosystem, this was an eye-opening observation for me. It just goes to show how deep the pan-India social buy-in into startups has gradually become.
He mentioned how in his initial years of sourcing from India, he felt like his suppliers were these small, unorganized, and resource-poor family businesses. He was sourcing from what he saw as a largely poor country.
Over the last 2 decades, he has seen how the same suppliers have become more professional, their manufacturing floors have become more sophisticated, and now, he feels they are comparable to similar businesses in China and SE Asia.
This was heartening for me to hear. SMBs are the backbone of India’s economy and key to its resilience. Improved productivity in this part of the economy will unlock a lot of value that will also percolate down much better.
Given rising global risk and uncertainty (eg. the Ukraine war near his region), having supply chain optionality has become more important than ever before. This person wants a sourcing network that is spread across multiple suppliers in different countries and is, therefore, resistant to global shocks.
He believes this trend is going to significantly benefit India, given it is one of the few countries globally that has scale in manufacturing capacity. While European and Chinese suppliers tend to operate in ‘boxes’ with rigid rules, he loves that Indian suppliers tend to be more flexible, thinking on their feet and problem-solving on the fly.
In my eyes, while the Indian business hustle (‘Jugaad’ mindset) is key to survival amongst a web of local complexities and inefficiencies, it has been a liability in terms of doing business with the world.
However, combine this hustle with strategic thinking, focus on quality, and a strong work ethic – and Indian entrepreneurs can create magic!
He mentioned that very recently, a major national newspaper in Belgium published a story talking about the decline of China and predicted that India would be the next global powerhouse. It was essentially prompting Belgium to do more business with India.
However, he has also seen the flip side where there is a negative legacy perception around doing business with Indian companies, particularly across Europe and even in Asia. Apprehensions like nothing will get delivered on time, quality will be inferior, manufacturing guidelines won’t be followed etc.
He felt that for India to take its rightful place in global trade, its businesses need to make a conscious effort to break this perception.
I see similar biases at play all the time even with respect to the Indian tech and venture ecosystem. Things like:
“India can only do IT services and can’t produce a global software product company” – Freshworks changed that.
“India is the back office of the world and can’t do real innovation” – Chandrayaan, Covaxin, and Brahmos are changing that.
“Indian tech companies can’t dominate in developed markets” – Paytm’s Japanese product is already amongst the top payment apps in the country.
“Indian airports are the worst in the world” – check out New Delhi T3 and Bangalore T2.
We are now sitting on a generational opportunity to break these biases in almost every vertical. As a venture investor, one of my core thesis is around breaking the bias that “India can’t export cutting-edge innovation”. I see companies like Flytbase, Playto Labs, and Tydy in my portfolio that make me believe!
So, my main takeaway from this convo with a Belgian stranger, over a plate of dosa and piping hot filter coffee, was this – India is changing…fast, and everyone globally is noticing it and experiencing it. We are, however, fighting against legacy perceptions, and it’s our collective responsibility to proactively change that by delivering the highest quality in whatever touch points each of us has with the rest of the world.
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