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In 2019, some twelve years after its debut in 2007, CBS comedy The Big Bang Theory not only became the longest-running American multi-camera sitcom but also crystallised through astrophysicist Rajesh Koothrappali an image of the (stereo) typical Indian techie among foreign audiences: male, South Indian, brainy, technology whizz, adorkable, Sandra Bullock stan…
As Indians today are increasingly building successful tech and software businesses in the country and overseas, global interest in their technological abilities—programming, coding and cloud computing, particularly—is similarly rising among investors as well as industry experts.
With SaaS startup Freshworks making a stellar trading debut on Nasdaq last year, which turned the company into a decacorn and over 500 of its employees into millionaires overnight, and six new SaaS unicorns popping up this year, the software-as-a-service sector appears to have captured the nation’s imagination.
A recent CII-EY study expects India to soon become the world’s next SaaS capital, with the market likely to reach around $25 billion by 2025. A report by McKinsey and SaaSBOOMi predicts the market size to reach $1 trillion by the decade’s end. While rising capital availability and digitisation in the country might be attributed to the sector’s burgeoning expansion, what exactly is it that enables the Indian mind, whether it operates within or beyond the border, to be so good at SaaS?
The Indian Alpha Geek Doesn’t Shy Away From Problems
Confident and passionate, the Indian SaaS talent pool is far from its book-smart but socially shy television counterpart, say successful entrepreneurs.
“Proficiency in technical skills is absolutely a must for a job in the SaaS sector, but besides that, merit and confidence in oneself are two things that matter the most to me,” said Nilesh Patel, co-founder and CEO, Leadsquared, which turned a unicorn this June.
“Our engineering team is composed of confident youngsters who care about building a customer-centric business. They are not necessarily introverted: they can have quality debates with the product managers around what we’re building and why,” added Srikrishnan Ganesan, co-founder, California-based Rocketlane.
According to the founder and CEO of London-based Kovai.co, Saravana Kumar, the real reason Indians do well in the SaaS space is because we are, in essence, problem-solvers who are also good at understanding user perspectives to foretell the scope of potential solutions.
“We are attuned to finding solutions. Our education system also allows us to start interacting with technology from a young age, so by the age of 12-14, children began deciding which stream they want to specialize in. Most Indian curriculums start teaching children computer languages like C and C++ from the age of 14,” explained Kumar.
One would agree with Kumar since in a large and still-developing South Asian country that is constrained by diverse cultural and geographical issues, problem-solving is more than an abstract attribute but rather a crucial survival tactic that is only empowered further by the use of technology in predicting outcomes.
Praval Singh, vice president, Zoho Corp, believes there is also a social aspect to India nurturing tech talent. “A lot of this is rooted in social conditioning. Parents often nudge their children into choosing a profession as per their idea of maintaining a “social standing”, and engineering is one of them,” he explained. Chennai-based Zoho, which remains bootstrapped till date, reported over $1 billion in revenue last year.
“Indians are extremely tech savvy and great at service-oriented roles,” agreed Rangarajan Seshadri, CEO, Chennai-based Neeyamo, as he opined on why SaaS as an industry attracts us. “We are also great at understanding how an industry is shaping up, therefore knowing which solution will gain prominence when, understanding what the customer requirement is, and building newer solutions, all come organically to us,” he stated.
Self-perpetuation in the Indian SaaS Sector: An ‘Atmanirbhar’ Industry?
For a country that waged and won a fight for independence from colonial rule through the Swadeshi movement, self-reliance perhaps comes to us most naturally—quite literally, it seems. Just as nature sustains itself through multiplication, the Indian SaaS industry’s boom is due in part to self-perpetuation, which is perhaps best exemplified by what is amusingly called the ‘Zoho Mafia’.
Former employees of Zoho have gone on to found successful and prominent startups of their own, including Freshworks and Chargebee, among others. As per a Bain & Company report released last year, it is estimated that over 65 such ventures were born after Zoho and Freshworks employees turned entrepreneurs.
Further, these early entrepreneurs undertook many an initiative to help grow the Indian SaaS ecosystem, including SaaSBOOMi: a ‘pay it forward’ community of SaaS founders who came together in 2015 to learn from and network with each other. India now has a growing ecosystem of enablers comprising domestic and global SaaS investors; over a hundred SaaS angels with four or more investments; incubators and accelerators such as xto10x and Flipkart Leap; and SaaS development events and initiatives sponsored by communities such as SaasBOOMi, noted the Bain report.
Moreover, the Indian SaaS community has been devising even more ways of encouraging and enhancing the talent pool, such as by way of company-run up-skilling programs for current employees and aspiring students. “Zoho views talent as the capital and foundation of our company. Therefore, we invest in our people—from mentoring new team members and running incubation programmes to conducting vocational and technical skill workshops for them,” stated Singh.
The STEM fields, particularly technology, have routinely featured a skill-gap imperative. Thus, as a meaningful alternative to conventional colleges and to help bridge the growing gap between industry expectations and graduate talent, Zoho launched the Zoho Schools of Learning (ZSL) in 2005. Under this initiative, students who have completed Class XII or diploma (10+3) are trained for 24 months, and those who complete the course join the company as employees.
“There is no fee for ZSL, instead, graduates are given a stipend during their tenure. ZSL graduates make for 10% of Zoho’s total workforce. ZSL now has three arms—School of Technology, School of Business, and School of Design, and is operational in two branches: Chennai and Tenkasi,” said Singh. Similarly, Kovai.co offers internship programmes to fresh graduates for a period of six months, wherein they undergo in-depth theoretical and practical on-the-job trainings and are moulded to be SaaS-ready senior architects and net coders.
Neeyamo, too, has an industry-academia connect via its Genesis programme, which aims to nurture the right skills in students and also partner with educational bodies to create customized collaboration programs such as the student ambassador program and periodic newsletters. “The program will plan regular engagement events such as Talanton, guest lectures, placement connect, fresher’s meet and so on to create a stronger connection with the students,” said Seshadri.
A Tale of Many Cities
The Indian SaaS talent pool—both employees and entrepreneurs—comes from expected as well as unexpected quarters. Chennai, for instance, is undoubtedly the sector’s Silicon Valley, housing over a 1000 SaaS startups. The South, in general, comprises a cluster of tech hubs in Bengaluru, Hyderabad, Pune, etc., lending some weight to pop culture’s easy assumptions about Indian techies’ Dravidian identities.
Much like Koothrappali, who’s presumably of Malayali descent, many prominent Indian and Indian-origin techies hail from the South: Zoho founder Sridhar Vembu, Freshworks founder Girish Mathrubootham, Alphabet CEO Sundar Pichai, Microsoft CEO Satya Nadella, and IBM CEO Arvind Krishna, to name a few.
“But it is also true that the talent we see is usually from all over the country, be it North, South, East or West. Some of Neeyamo’s offices are outside of the South in smaller Tier II cities such as Nagpur,” explained Seshadri, adding, “The young talent in Tier II and III cities is not lagging when it comes to using digital platforms and courses to stay relevant in today’s market.”
“When it comes to recruiting talent, Zoho has always been conscious of the fact that we want to retain top talent in their native places rather than uprooting and moving them to urban areas. Keeping this philosophy in mind, we deployed two strategies: transnational localism for our global expansion, and hiring and expanding in non-urban and rural areas,” said Singh. Leadsquared, too, tries to ensure that it employs people from a variety of backgrounds. “I believe, the most capable people can sometimes be found in the most unexpected places,” opined Patel.
Perhaps, it is the diversity of their experiences that enables the Indian SaaS talent to identify myriad problems and devise ingenious solutions, something that is increasingly being valued by the ecosystem at large, including investors.
“Since we invest at a very early stage, we focus a lot on the founders’ insights and experience and try to look for the founder-market fit,” said Gaurav Chaturvedi, partner, Kae Capital, adding, “Because of better cost structures, Indian SaaS companies are inherently more capital efficient compared to their global counterparts.”
“The ability of Indian SaaS entrepreneurs to appreciate product design that can transcend geographies is compelling and allows them to straddle different markets to tap into a larger addressable opportunity,” noted Alok Mittal, co-founder and CEO, Indifi Technologies. He believes that in some sense, Indian entrepreneurs have collectively developed playbooks for different kinds of SaaS opportunities, and this shared learning is powering their growth.