Indian entrepreneurs in US stuck with temporary, non-immigrant work visas

SAN FRANCISCO: "What on earth am I doing here!" Kunal Bahl said to himself in frustration, as he waited seven long hours to meet with a prospective client for his venture SnapDeal. As the clock ticked away in the lobby of the shoe-making company's India office, Bahl revisited the fragments of the American Dream he had lived - road trips aboard his convertible along the Pacific coast with the ocean on one side and the mountains on the other. But most of all, the professionalism and respect for young entrepreneurs like himself. He had started his first company, a detergent start-up, while still studying at Wharton. 

When he didn't win the visa lottery, Bahl had to pack up his entrepreneurial dreams and his bags and return home to Delhi. Visas are granted through a lottery system when the number of applicants is more than the number of visas to be granted. "There are no options then. There's nobody you can petition, no forums you can appeal to," he says. 

Over half-a-million highly-educated and skilled immigrants are stuck with temporary, non-immigrant work visas like the H-1B, which don't allow them to start a company or even change jobs. Pushed to a corner, they come back to India, where the entrepreneurial climate is far from ideal. 

These are people with new business ideas, energy and the drive to succeed in an ecosystem that fosters creativity, but their dreams are shattered by a system which believes they are taking away American jobs. But in reality, this is actually hurting job creation in recession-hit US. The immigration system's fears may not be centred in reality. 

Between 1995 and 2005, 25% of Silicon Valley's startups - which had at least one immigrant founder - employed nearly 4,50,000 people. The companies generated $52 billion in revenue in 2006, according to a report titled, Intellectual Property, the Immigration Backlog, and a Reverse Brain-Drain, co-authored by Vivek Wadhwa, an entrepreneur and academic who has been researching the subject for years. 

"Now, due to immigration issues, that's a loss of that many jobs," says Wadhwa, whose first company, Seer Technologies, created 1,000 jobs within five years and second company, Relativity Technologies, created 200 within three years. 

Besides, by losing some of the brightest minds, US immigration is putting Silicon Valley's innovation hub status in serious jeopardy. Yale graduate and former Amazon employee Sachin Garg says visa issues prevented him from pursuing the two business ideas he had built specifically for the American market. Garg might employ just 10 people right now at his online book store upRack.com but that's because he just started it a few months ago. By as close as 2016, he claims the company will grow in revenue to $1billion and employ over 4,000 people. "These jobs could have belonged to the US," says Wadhwa. 

On the other side of the fence, most dreams fade out with the H-1B visa (see box). Hardeep Singh knows just what it feels like. He quit his high-profile job in San Francisco with an investment bank, to start Costnomics - a software as a service start-up that promotes IT financial transparency - with his partner Nilesh Patel. Being on H-1B meant he could invest in the company, but not take money from it. His old employer had offered to file for his green card. "But that meant I'd be stuck with the company for 10 years and my youth, energy, go-get-it factor would all be gone. So I decided that I'd rather go," says Singh who moved to Pune to start the India development team for the company. 

Like Singh, Prakash Mishra too had invested in a start-up in the Bay Area but could neither raise much funding nor reap the monetary benefits because he was on the temporary H-1B. After years of trying, when he finally left to become an entrepreneur in India, the company was acquired and Mishra got nothing. A start-up he worked for earlier too, got acquired by Google but since he wasn't on a green card, he couldn't avail of the money. "If I'd have had a green card, I could have had $15 million in the bank," Mishra says. 

Much has been said about Indians and Chinese immigrants returning to their home to take advantage of the booming economies there. While that's true, many return frustrated with no real choice. That too, after having spent hundreds of thousands of dollars in obtaining degrees with the hope that they'll let you live the dream entrepreneurial life in America. "You don't tell mummy and daddy that you're back because America didn't want you. You say you came back because you missed them and would rather pursue your entrepreneurial dreams here with them in this booming economy," says Wadhwa. 

It's also harder to be an entrepreneur in India. "Indian VCs are focused on how you can solve a problem in India. Our solution is focused on Global 2000 companies which are mainly in the US and Europe. They don't even understand the concept of our idea! The more I stay in front of the customer and US VCs, the more profitable we can get as a company and the more jobs I can create in the US... it's all one big cycle," says Singh. His presence in the US is pressing for the company - the clients are mostly American, and he needs to raise funds to expand his business. 

But the US' self-inflicted loss could become India's gain in terms of not only jobs in the short term but also innovation. As emerging powers like China threaten its supremacy, it's in America's interest to maintain itself as a lucrative innovation hub. After all, foreign nationals accounted for 24.2% of all US international patent applications in 2006. The Chinese led the pack, followed by Indians. 

Ditched by the US, these entrepreneurs are putting their American lessons to good use in India. Garg for instance, created upRack.com straight out of his Amazon learnings. "It will revolutionise online retail in India just like Amazon did in the US," he says. Bahl utilised the lessons he had learned from the detergent start-up he had founded in the US to create SnapDeal; today, he's a rising entrepreneur in India, having innovatively created an entire market that didn't exist. 

Silicon Valley will certainly lose out on talent like Anil Panariya, a semiconductor engineer who lives five minutes away from Google, Nasa-Ames, LinkedIn, Complete Genomics and others, in Mountain View, California. 

Panariya has been itching to take time off and work on a prototype for years. Taking three months off to build a product even if it doesn't work is only normal in this neighbourhood. But his H-1B visa status doesn't let him do this. 

"I live in this global innovation hub but I can't build my own innovation due to my visa. I'm a technical person and I want to experiment with some prototypes. If these work out then of course I'll pursue a business idea. However, if these don't, then I would return to my day job. Is this basic freedom too much to ask for? If returning to my home country is the only way to live my dreams, then I guess that's my only option," he says. 

After years of struggling with immigration issues, Rohit Kulkarni finally got the much-coveted green card employee authorisation document (EAD). This allowed him to finally launch a company whose first product is a health-tracking iPhone app. "I worked like crazy. But I just couldn't give it the dedication and the nurturing a start-up needs because I was too busy complying with immigration rules and working full-time for my H-1B and green card employers," says Kulkarni. Worse, in spite of burning all that midnight oil, Kulkarni's green card wasn't approved, forcing him to move to Paris and pursuing his idea there. "The US offered my wife wonderful work opportunities but we moved to France so that I could finally focus on my company," says Kulkarni. 

This explains why investors Paul Graham, Brad Feld and others have long been pushing for the Startup Visa. Under the current legislation, it will be granted to foreigners if they can raise at least $100,000 from a US investor to start their company and create at least five new American jobs after two years. 

Alternatively, if the person is on H-1B visa and/or is a student at an American university, the candidate can get a startup visa if s/he earns at least $60,000 per year plus $20,000 from a US investor. (see box: The Startup Bill.) "The impact of such a bill would be huge and even more so for Silicon Valley," says Wadhwa, who expects the legislation to be passed between three and six months. 

The start-up visa might nudge university graduates to turn into entrepreneurs. But will it impact people like Panariya who aren't in academic cocoons and need time to build prototypes before they can make a case for funding? 

Most important, won't it divert the person's attention away from innovation towards financing and job-creation? 

Thus, how would it be different from the immigration distractions which drove Kulkarni to France? "It's for risk-takers," says Wadhwa. And isn't that what entrepreneurship is all about?

Source: The Economic Times, 29 MAR, 2011

Dark side of giving: The rise of philanthro-capitalism

A few years ago, Paul Kagame, president of Rwanda, had a chance meeting with Som Pal, former member of the Planning Commission and earlier minister of state for agriculture, and was bowled over by his sage-like views on developmental issues. The president promptly invited Som Pal to his blighted country to suggest policy measures to get out of a developmental quagmire. Som Pal travelled to Rwanda; he was hosted at the presidential palace and allocated an entire office during two long stints. 

Rwanda was sitting on a food security crisis in spite of having fertile land and favourable climatic conditions. "A set of policy guidelines and an action plan were quickly crafted. I held out a promise to Kagame - Rwanda could be food surplus in a short time," recalls Som Pal.

His plans were, however, rendered futile, as a hostile system overwhelmed him, even attempting to buy water hand-pumps at $12,500 apiece. "Most African leaders are only keen on projecting the agony of their people for international support in dollars," laments Som Pal. "A complete nexus between institutions, large corporations and narrow, vested interests are at work." Elements of this trend can be seen in India too. 

Since then, Som Pal has had several brushes with Kenya and Zambia too; the story runs along similar lines. How then would he evaluate the much celebrated Alliance for a Green Revolution in Africa (AGRA) - an initiative driven by the Rockefeller Foundation and the Bill & Melinda Gates Foundation, the oldest and the largest philanthropic repositories, respectively, in the world? The Gates Foundation alone has committed $264.5 million to AGRA. 

"They are using the pitiable condition of the African people to get a foothold into the continent," explains Som Pal. "Their large philanthropic resources are being utilised to further the interests of business." In countries with weak governance mechanisms, like in Africa, it becomes a lot easier. 

Proponents of chemical-free and GMO-free (genetically modified organisms), sustainable agricultural practices like Som Pal are beginning to feel uncomfortable about AGRA and a host of big-ticket philanthropic initiatives across developing countries. As are an increasing number of independent policy wonks and scientists across the world. 

For instance, the Gates Foundation's sheer clout is taking it, intentionally or unintentionally, to places where policy, business and philanthropy intersect. There are its business and investment links with large companies that are driven by the profit motive. There is its growing stranglehold in the policy-making space across emerging markets, especially in education, healthcare and agriculture. 

The $23.1-million investment by the Gates Foundation in Monsanto, the world's largest producer of GM seeds, is a small example of a trend. 

Civil society organisations see it as vindication of what they had always suspected: the unstated agenda of pushing GM crops into Africa. In recent times, though, following strident protests, Bill Gates appears to have tempered his views on agriculture; he talks about picking the best from organics and tech-driven agriculture. 

The Gates Foundation's insistence that its investments and grants ought to be seen separately has also attracted considerable flak. The question is asked: how can it be a 'passive investor' in companies such as Monsanto when its avowed goal is doing good with philanthropic monies? "Doubts about his (Bill Gates) larger motives, despite some good outcomes of his charity, are beginning to cloud my thinking," concedes Mira Shiva, a public health activist. Two emails sent by ET to the Gates Foundation, on December 29 and March 22, went unanswered. 

In his blog postings and writings, Eric Holt-Gimenez, director of the US-based Food First: Institute for Food and Development Policy, labels it 'Monsanto in Gates' clothing'. 

He describes how AGRA, as a prelude to the introduction of GMOs, is laying the ground for a conventional breeding programme - labs, experiment stations, agronomists, extensionists, biologists and farmer seeds. He points out that about 80% of the Gates Foundation's allocation to Kenya has gone into biotech research; in 2008, about 30% of its agri-development funds went into promoting and developing GM seeds. 

GRAIN, an international non-profit that supports community-controlled and biodiversity-based food systems, has been wary of public-private coalitions like AGRA and the Consultative Group on International Agricultural Research (CGIAR). 

It says their research programmes feed into the growth strategies of corporations; further, the programmes often adopt elements of business models of those very companies. Delhi-based Shalini Bhutani, till recently representing GRAIN, sees a design in the Gates Foundation's announcement of the Borlaug Institute for South Asia in Bihar, following a recent visit by Bill Gates. "The involvement of this set of players in the promotion of GM rice is too well known," she says. AGRA, it is often charged, has been created with little civil society or farmer engagement. Protests are now breaking out across the continent. The Kenya Biodiversity Coalition, with a membership of 65 civil society and farmer organisations, tried to block the import of a 40,000 tonne consignment of GM maize into the country last year. 




Source: The Economic Times, 25th March 2011

Life as it is meant for us!

Sometimes, I look at the places I have called home throughout my life and think about wonderful things. They remind me of my culture, my heritage, my up-bringing and the humility gone under the very roots of my existence. I appreciate them all with humble and meek acceptance. I value them all with utmost respect and admiration. After this, I call myself disciplined.

Sometimes, I look at the places I have studied at. I look at the friends I have grown up with; the teachers who’ve taught me about the most important thing in my life: patience. I look at the classrooms in which I have spent most of my childhood, studying, laughing, enjoying etc. and sometimes, very well, crying! I look at various lessons I have learned through the past and lessons I am and will be learning as I progress towards the future. I process and refine my education, my leaning, and my experiences. After this, I call myself intelligent.

Sometimes, I look at the places I have traveled to. I think of steep mountain ranges, of gentle river passages, and of serene, green valleys. I look at all these things and say, “Wow! I am a part of the beautiful creations nature has to offer.” I recollect all the excitement, all the liveliness and put it to good use by reliving each and every moment I have spent on those heavenly places. After this, I call myself content.

Sometimes, I look at the relationships I have had. I think of my parents, my friends, my relatives. I think of the love gone behind sustaining and enriching these relationships. I think about the amount of hard work gone behind continuing these relationships. I think about how lucky I have been to be a part of these special moments, these special bonds. After this, I call myself blessed.

But at the end of this all, I look at myself in the mirror. I look at how much I have changed through these years, how different I have become all of a sudden. Only yesterday, I was a kid, enjoying my life as it happened. And now, as an adult, I have a lot of responsibilities, a lot of work, and a lot of liabilities. Things that used to be simpler are not simple now. Things that used to be smaller and better are bigger and more complex now. Life has moved on and along with it, so has the expectations and needs. The reason to rejoice comes for a few times these days and that too, for a brief stay. I try to smile faintly, trying to embrace gratitude but till the time it reaches me, the time dies down. Frustration, depression, anger are all part and parcel of this adult life now. I cope with it, intertwining  with reality. After this, I call myself challenged.  

But then, there lies hope amidst it all. The hope to think about the past and recalling the beautiful memories inscribed in it. The hope to look at the future and being positive about success regardless of any failure. The hope to celebrate life as happiness comes by, even in small packages. Because life is meant to be lived as we live it, as we mean it. Life comprises of our emotions, of our senses. The better we feel, the happier life becomes for us.

Things that bother us now were present before and will be there in the future as well. Learn to look past them, past their existence because the things we can learn from life are far greater than what we have lost or will lose.

I live to see tomorrow because of the new surprises rather than the old banalities. I live to see tomorrow because of new experiences and new meanings. Yeah, life is all about providing a new meaning to it every day. For me, it is all about staying happy but more than that, it’s also about trying to make others happy first!

And after this, I call myself human.

Better to be reviled than ignored

Negative publicity is good for unknown firms, bad for established ones

THERE is no such thing as bad publicity, goes the adage. This is bunk. Just ask Toyota, a firm that once had a peerless reputation for reliability but spent much of last year battling allegations that its cars had defective accelerators. Or Sanlu, a Chinese company that was revealed to be peddling poisonous milk. It is now bankrupt and its top executives are in jail.

Yet if your starting point is obscurity, even bad publicity may be helpful, argues Alan Sorensen, an economics professor at Stanford University’s Graduate School of Business. He looked at the effect of book reviews in the New York Times. In a study published in Marketing Science, he found that well-known authors who earned glowing reviews for a new book could expect to sell 42% more copies, whereas a negative review caused sales to drop by 15%. For unknown authors, however, it did not matter whether a book was panned or lauded. Simply being reviewed in the Times bumped up sales by a third.

Mr Sorensen extrapolated his findings to other businesses. For small brands fighting for recognition in crowded markets, almost any publicity is beneficial, he reckons. One reason is that, for lesser-known brands, negative perceptions fade more quickly in consumers’ minds than their general awareness of the product. When coming across a brand whose boss is, say, a philanderer, they recognise it but don’t remember why. With established brands, on the other hand, the whiff of bad publicity lingers longer.

Mr Sorenson suspects that some consumers take pleasure in exploring the ridiculed. “Borat” (pictured above) made Kazakhstan sound awful, claiming among other things that its national anthem included the couplet “Kazakhstan’s prostitutes cleanest in the region/ Except of course for Turkmenistan’s.” Yet the country received a fourfold increase in tourist inquiries after the film was released, observes Mr Sorenson.

There are some limits to the theory. Vitaly Borker, the founder of DecorMyEyes, an online optician, tried to generate publicity by replying abusively to dissatisfied customers, and even allegedly threatening some of them with violence. Mr Borker boasted to the New York Times that provoking masses of complaints bumped him to the top of Google searches for eyewear. His brilliant plan backfired, however: Mr Borker was arrested in December.

Source: The Economist

At Davos, analyst sees a bank crisis in 2015

NEW YORK: As politicians, executives and financiers networked at parties and panels last week in Davos, Switzerland , Barrie Wilkinson was in a nearby hotel, warning that a 2015 financial catastrophe may be looming.


“The fundamentals haven’t been addressed at all,” Wilkinson, a London-based partner at consulting firm Oliver Wyman , said in an interview at the Hotel Morosani Schweizerhof . “The things that caused the previous crisis — loose monetary policy and trade imbalances — they’re actually bigger now than they were then.”


In the caste system of the World Economic Forum’s annual event in the Swiss ski resort, Wilkinson was at a bottom rung, with an identification badge that denied him access to most sessions and soirees. His message clashed with the optimistic tone of many at the centre of the meeting , who were eager to emphasise the progress made. “The systemic reforms that have been accomplished are significant,” Canadian finance minister Jim Flaherty said as he left a private meeting with finance company chief executive officers on January 29. “We need to communicate better that financial institutions globally are operating on a very different basis today, that they are operating with higher capital and are better regulated.”


‘An Avoidable History’


Wilkinson’s report, titled “The Financial Crisis of 2015: An Avoidable History” , isn’t so sanguine. The 24-page study describes how banks, unwilling to accept the lower returns on equity, or ROEs, that result from higher capital requirements, may fuel a new bubble by chasing high returns in commodities or emerging markets. Regulators, by focusing their restraints on banks, may drive risk-taking into unregulated funds that also pose danger to the system. The report urges bank executives and shareholders to accept that returns of the past are unsustainable and that they need to do a better job of monitoring risks, especially in areas that produce unusually high profits. “Banks need to be less leveraged,” said Wilkinson, 38, who has an engineering degree from the University of Cambridge’s Trinity College and has worked since 1993 at Oliver Wyman, where he focuses on risk management. “The true test for me of whether they’ve deleveraged is if the industry-wide ROEs come down. If they don’t , I’m very suspicious that there are hidden risks in the system.”


UBS Advice


Oliver Wyman, a subsidiary of New York-based Marsh & McLennan Cos, played a role in the last financial crisis. The firm’s strategy consultants advised UBS AG’s fixed-income unit, which was lagging other divisions in early 2007, to invest in US mortgage securities and collateralised debt obligations to boost returns , according to a review submitted by UBS to Switzerland’s federal banking commission in April 2008. Those investments helped fuel almost $58 billion in losses and writedowns at the Zurich-based bank.


After the 2008 crisis, governments and central banks spent unprecedented amounts of taxpayer money to bail out the financial system . Part of Wilkinson’s concern is that if the system is allowed to return to its old boom-bust habits, debt-strapped governments may not be able to handle the fallout of another crisis, either financially or politically. “If there is another banking crisis, the Western governments are just in no shape to stabilise the system, they’ve expended their entire arsenal on the last round of fiscal injections,” Wilkinson said.


‘Incipient Sovereign Crisis’


The same theme pervaded a World Economic Forum dinner on January 28 that discussed what would happen if a big bank were allowed to fail. The group, which included Nomura Holdings chief operating officer Takumi Shibata, 58, former Italian finance minister Domenico Siniscalco, 56, and ING Groep CEO Jan Hommen, concluded that governments have no choice but to come to the rescue of any failing multinational megabank because there is no system to handle a controlled failure. If a government was unable to save such a bank, the contagion and damage could be severe.
“I came into this dinner somewhat pessimistic and worried about the assignment we are here to discuss ,” Simon Johnson , a professor at the Massachusetts Institute of Technology’s Sloan School of Management and a Bloomberg News columnist , said halfway through the evening. “I am now terrified. There is an incipient sovereign crisis here mixed in with the bank crisis.”


Dimon, Dell


Financiers at Davos this year weren’t talking much about future returns on equity or potential bubbles . Instead, they were holding parties and meeting clients. JPMorgan Chase CEO Jamie Dimon , 54, hosted guests including Bank of Canada Governor Mark Carney and Dell founder Michael Dell, 45, at a reception one night. He was out late the next night with hedge fund manager Louis Bacon, 54, and other guests at a party hosted by Google Inc. Siniscalco, who now leads Morgan Stanley in Italy , said he had about 35 meetings in Davos this year compared with 15 last year. “In Davos, there’s a lot of optimism here, and I’m quite surprised by it, especially from corporate CEOs,” said Tarun Jotwani, CEO of Europe, the Middle East and Africa and global head of fixed income at Nomura. “It is against a backdrop of potentially the biggest macroeconomic public-finance mismatches that I’ve ever seen in my career.”


Pushing Risk-Taking


When bankers weren’t trying to win business, they were worrying about governments’ fiscal policy in the US and Western Europe or reiterating the role that finance plays. And they echoed one element of Wilkinson’s report — the part that said a focus on bank rules could push risk-taking into hedge funds that don’t fall under the regulations.


Source: The Economic Times
1 Feb, 2011, 11.56AM IST,Bloomberg