India: Many Reasons to Say Yes
A booming middle class and a tech-savvy work force make India an appealing market.
This story first appeared in the June 2008 issue of Entrepreneur. To receive the magazine, click here to subscribe.To learn about other featured countries, please check out our Global Hot Spots page.
For Hayden Hamilton, growing GreenPrint Technologies would have been too pricey if he'd done everything in his Portland, Oregon, headquarters. So Hamilton, 31, turned to India to bolster GreenPrint, which sells software that helps reduce printing costs by eliminating wasteful pages before they're printed. Today, the majority of Hamilton's software is developed in India, and he projects sales of $6 million this year.
As with IBM and Microsoft, the draw for Hamilton was a huge pool of affordable, skilled employees. Yet salaries are rising. Interviewing a prospective hire, Hamilton found that "he was expecting more in India than I think we would have paid for the same person in the U.S."
Such newfound wealth has, by some estimates, resulted in a middle class that comes close to rivaling the population of the United States. "The upper-class market is very eager to consume," says Mira Kamdar, author of Planet India: How the Fastest Growing Democracy Is Transforming America and the World, who notes that even a fraction of India's supersize 1.1 billion population is a huge market.
But just because India is growing and well-trodden by huge multinationals, it doesn't mean that doing business there is as simple as plucking tasty morsels from the local tandoori buffet. High-tech sector aside, the $3 trillion Indian economy is still very immature. Hamilton, for example, spent three hours applying for a phone line--then waited a month to get it installed. When he needed decent bubble wrap like he'd find anywhere in Portland, he had to commission a manufacturer to do a custom run. What exacerbated the little snafus was Indians' proclivity to deliver the answer they thought he wanted, even if it wasn't accurate.
"Indians have the hardest time saying no, and there are four or five different ways we say no," says Ranjini Manian, who lives in Chennai, India, and is author of Doing Business in India for Dummies. "If you're waiting to hear 'N-O,' it won't be part of our vocabulary." Confusion also comes from body language: Indians nod in assent by moving their heads in a way that, to Americans, conveys ambivalence or disagreement.
And India's rigid social structure means the boss is The Boss and subordinates are truly that; don't expect employees to readily adapt to American-style team-work. Also, smaller companies have a harder time recruiting and retaining employees who prefer to work for big-shot brands.
Of course, working on anything presupposes that employees will be at their desks and the lights and computers will be functioning, which isn't necessarily a given. Hamilton reports that a two-mile trip can take hours thanks to India's congested traffic, and power outages require that companies spring for expensive battery backup or generators.
But the adjustments have been well worth the headaches for GreenPrint--so much so that Hamilton decided to launch a second business in India, ProgressiveRx, an online pharmacy that imports pharmaceuticals from Asia. "There is just an amazing amount of talent," says Hamilton, who notes that younger Indians are becoming much more acclimated to global business standards. "The number of qualified hires that we've found in almost all areas we looked is very impressive."
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