The first brain drain started in the 90s, when talented Indians left the country for better job opportunities.
The second brain drain has begun.
Brain Drain 2.0: Driven by ambitious startups
Just like getting a US job was a cool thing in the 90s, starting up is becoming that cool thing in India now.
Plus, the rise of two hot sectors, SAAS and Crypto have opened a new set of opportunities for Indian founders.
And to scale both of these businesses, India is turning out to be a bad choice of headquarters. Unless the products are meant for the Indian market, most SAAS businesses are HQed outside India now.
They struggle to sell in India and US anyways provide a great set of ecosystem of investors as well as customer base.
Ditto for consumer businesses wherein the propensity to pay is much higher (FWD product has >60% paying customers outside India) – but that’s something which is a function of market dynamics and govt can’t do much about it. But 👇
What about the Web 3 businesses?
The brain drain is absolutely crazySandeep Nailwal, cofounder of Polygon
Practically speaking, you are doing an injustice to your ambition if you are starting a Web 3 business and you are headquartered in India.
While Web 3 provides a massive opportunity for any country to leapfrog, it also poses a lot of threats and mandates maturity (on behalf of the govt) to absorb the early chaotic days of Web 3 – could be from taxation, governance, legalities, cross-boundary payments point of view.
I want to live in India and promote the Web3 ecosystem, But overall, the way the regulatory uncertainty is there and how big Polygon has become it doesn’t make sense for us or for any team to expose their protocols to local risks.Sandeep Nailwal, cofounder of Polygon / source
The govt’s indecision, lack of clarity and ever-changing rules is forcing founders to quit the country – and at max, use Indian talent as a back-office/development center.
Plus, the last regulation around taxation will also deter many to invest in Crypto, forcing the makers to move out of the country.
Dear Govt: What business are you in?
Government needs to understand its role – i.e. of being an enabler and not a blocker.
To stop brain drain 2.0, the government needs to let go of the insecurity associated with crypto and embrace learning from the other countries.
The time to act is NOW. A decision today defines the decade for this country.