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Dubai Reality Check: An Indian VC's Year of Truth

48 points by koolhead17 1y ago

kylehotchkiss 1y ago
Super well articulated! I loved seeing the learning process
- needSomeCoffee 1y ago
  Agree completely. Writing was brilliant. Kudos to the author.
Simon_O_Rourke 1y ago
> what business partners want in a deal is enhancing prestige, aligning with family business values, and offering something genuinely unique in a market where exclusivity matters. There must be some awfully corrupt shenanigans selling stuff out there so. No wonder the Chinese telcos run all Dubai's backbone infra, those guys are old hands at liberally distributing "incentives" to patriarchal organizations to get their way.
- SanjayMehta 1y ago
  They’re looking for partners in money laundering. Ever heard of the term “hawala?” Originates from this region.
  - abdulhaq 1y ago
    Hawala is a traditional way of transferring money from one location to another, it can be used for good and bad like all functions around money. Governments don't like it now because they can't spy on it.
  - tolerance 1y ago
    This is a gross generalization of the practice. And apparently it started in India. https://web.archive.org/web/20161228041941/https://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf https://web.archive.org/web/20161228041941/https://www.treas...
    - Simon_O_Rourke 1y ago
      The reason I'd highlighted Chinese telcos particularly, was an experience of my ex-wife who worked with a well known Western telecoms provider. She was out in the middle east (not Dubai though) to pitch for some 5G backbone business a while back. Anyway, when she flew in, there were a couple of Chinese guys in arrivals who were pointing a camera her direction and seemingly taking her photo. No biggie, she thought, and just thought it some weird coincidence. However, the next morning she left her room early to use the hotel gym, but doubled back upon forgetting her headphones and spotted the same Chinese guys outside her hotel room door trying to jam something in the lock.
      - fakedang 1y ago
        Nah, that's just an anecdotal incident you're extrapolating for the rest of the Middle East. And speaks more about Chinese business (espionage) culture. As for telcos using Chinese equipment, nearly every country outside the US, CANZUK, Japan,SK, India and EU use Chinese equipment.
- abdulhaq 1y ago
  what has family values and uniqueness got to do with corruption?
  - bigbacaloa 1y ago
    [dead]
  - ulfw 1y ago
    What do those have to do with running a successful tech company?
- ulfw 1y ago
  > offering something genuinely unique in a market where exclusivity matters That's the biggest joke for everyone who has ever dealt a tiny bit with the tech market over there. If China is me-too of US tech companies, South East Asia is me-too of Chinese companies and the Middle East is me-too of South East Asian companies. Think Uber -> Didi -> Grab -> Careem there is nothing 'genuinely unique' or 'exclusive' by having the same product and business idea implemented four times over. Yes each one has added significant local touch and flavour to it but... unique? Exclusive?
  - petesergeant 1y ago
    Interestingly I have found Careem to be significantly better than Grab, which is significantly better than Uber. That said, Amazon is much better than Lazada which is much better than Noon…
- fakedang 1y ago
  As someone who does business in Dubai, huge no! The key is in the top part of the statement - prestige. Your local partner wants to be seen as investing/using the latest and biggest technologies, whether it's AI, Salesforce (even for 100 person companies), AWS/Azure (even for tiny use cases that could be done via Office automation), Workday, Oracle and SAP, etc. The locals want to be affiliated to those technologies as it's a matter of prestige for them, even if they won't even be touching that tech with a long pole in reality. You make money in Dubai selling solutions, not SaaS, selling association and media presence. As for Dubai's data infrastructure, government mostly works with Azure and uses the Indian WITCH companies as their implementation architects. EDIT:- sometimes it gets so hard trying to convince the local partners and company execs why they don't need to use the "name brand" Salesforce CRM or the " hotshot" Oracle database, but huge caveat - if the top leadership of the company is young (think millennial scion of the founder), there's a huge chance they too will see it as futile and agree with you to swap to something more modern. Younger middle management locals are still the same - they care about the prestige factor more than actual results.
pm90 1y ago
> Here, the market demands you come dressed in a tuxedo, not the jeans and blazer that passed for formal back home. Your packaging, your experience, your digital presence – everything needs to exude a level of sophistication that would seem excessive in most Indian markets. The gist of the article just seems to be that the business environment in Dubai is (shocking!) different from that of India, with people needing different things. I don't quite understand or agree with the "competing with the best in the world" though, it just seems like the money people in Dubai just expect you to be better dressed, more presentable, and form a personal relationship before business deals.
- dyauspitr 1y ago
  No, what they’re looking for is fundamentally different. They don’t want better solutions or lower cost or greater efficiency. They want something that enhances clout.
jakelsaunders94 1y ago
I find articles like this super interesting, but they remind me that I’m a deeply technical person and as such would never be able to thrive in the ‘business’ world. The modern YC startup philosophy of ‘make something people want’ seems to be only partially true. There’s this whole world of coffee dates, relationship building and salesmanship which always feels slimy to me.
- cornfieldlabs 1y ago
  Yep I'll never succeed in a world where I have to "dress the part". Luckily this is an era where it doesn't matter much
  - sandeep1998 1y ago
    Do you run a business?
    - cornfieldlabs 1y ago
      Not yet :)
    - esperent 1y ago
      Yes. I never play fancy dress with suits. Formal for me means a nice, comfortable shirt and jeans or other clean trousers. On an average day I wear shorts and sandles because it's damn hot. I wear suits to funerals, and once to a wedding, but even most of the weddings I go to have a "smart casual" vibe them, no full suits required. I rarely meet with investors or anything like that, but when I do, not dressing up is a test. If they judge me for what I wear, beyond basic cleanliness, we're not a good fit for working together.
      - gsky 1y ago
        Wearing suits in a desert?
        1y ago
Oras 1y ago
The article is an example of someone who didn’t do their homework of research. How do you fly to a new country to establish a business without researching it, understand the culture, how business is done? The other point of “networking”, I don’t know how you could even make a business without networking, why this is shocking to OP?!
- alephnerd 1y ago
  To be brutally honest, FortyTwo VC is a low-mid tier early stage investor in the Indian market. There are better angels and early stage funds in India, but these guys couldn't differentiate themselves in the now increasingly competitive Indian VC scene. The cream of the crop of early stage startups in India tend to go to YC, Peak XV, some university alumni network programs, Antler, and a couple others.
  - gsky 1y ago
    All YC startups are crap these days
  - FlyingSnake 1y ago
    That seems to be a fair assessment. I’ve never heard of fourtyTwo and had to double check who they are.
- petesergeant 1y ago
  > The article is an example of someone who didn’t do their homework of research Yes, and as a result it’s interesting and informative.
alephnerd 1y ago
Unsurprising. Dubai investors (Khaleeji, Indian, or Russian) are looking for a "dhandha" - not a business. Any story that can't be easily translated into an "arbitrage" or "commodity" play just isn't going to land with them. Abu Dhabi has fairly good growth stage investors, but that's also because they tend to let the money managers and investors remain in London, SF, NYC, etc. You're better off remaining in the Indian market, or if you want deal flow abroad, then building relationships in the US, ASEAN, UK, or Australia unless you're a "VC" who's trying to land a Dubai Golden Visa in order to evade taxes back in India (these kinds of personas tend to overlap with the kinds who run real estate or export/import "dhandhas" back in India).
- dyauspitr 1y ago
  What is a dhandha? Like a way of life that is a business?
  - severnaya123 1y ago
    The literal translation is "business". But the contextual meaning here is closer to "arrangement/understanding". In India the word sometimes refers to underhanded/corrupt practices (there's a bollywood song where the lyrics go "sab ganda hai par dhandha hai ye", which can roughly be translated as "it's shady work, but that's business") With that said, I don't really agree with the parent comment here, but I don't know enough about business practices in Dubai so I may be wrong.
  - SanjayMehta 1y ago
    Literally it means “trade,” but in reality it means hustling. Real life example: a petty smuggler I knew had his younger brother run the shop, while he himself ran the “dhandha.” This was in the 80s when buying original CDs and Nike shoes needed you to know the right shop in South Delhi. The elder one knew all the Hong Kong and Singapore dealers, the right customs agents while the younger just sold the goods.
    - deleted 1y ago
      [deleted]
petesergeant 1y ago
Interestingly I’ve seen what felt like almost a directionally identical article written about Dubai -> Saudi, eg it’s all about building the personal relationships first, but even more so
anovikov 1y ago
Why doing so if they can do it in US where there's little to no bullshit of that sort, and way more investment dollars than in Dubai?
- shash 1y ago
  Actually, there's a lot of investment dollars in the mid-east - maybe more than in much of the US, and it's actively looking for good ideas. Also, for certain types of business, the environment is probably more conducive there than in the US...
- bigbacaloa 1y ago
  [dead]
- petesergeant 1y ago
  > can do it in US where there's little to no bullshit Hahahahahahahahahahahahaha. When power structures are theoretically eliminated, they’re simply harder to navigate.

48 points by koolhead17 1y ago

kylehotchkiss 1y ago

Super well articulated! I loved seeing the learning process

needSomeCoffee 1y ago
Agree completely. Writing was brilliant. Kudos to the author.

Simon_O_Rourke 1y ago

> what business partners want in a deal is enhancing prestige, aligning with family business values, and offering something genuinely unique in a market where exclusivity matters. There must be some awfully corrupt shenanigans selling stuff out there so. No wonder the Chinese telcos run all Dubai's backbone infra, those guys are old hands at liberally distributing "incentives" to patriarchal organizations to get their way.

SanjayMehta 1y ago
They’re looking for partners in money laundering. Ever heard of the term “hawala?” Originates from this region.
- abdulhaq 1y ago
  Hawala is a traditional way of transferring money from one location to another, it can be used for good and bad like all functions around money. Governments don't like it now because they can't spy on it.
- tolerance 1y ago
  This is a gross generalization of the practice. And apparently it started in India. https://web.archive.org/web/20161228041941/https://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf https://web.archive.org/web/20161228041941/https://www.treas...
  - Simon_O_Rourke 1y ago
    The reason I'd highlighted Chinese telcos particularly, was an experience of my ex-wife who worked with a well known Western telecoms provider. She was out in the middle east (not Dubai though) to pitch for some 5G backbone business a while back. Anyway, when she flew in, there were a couple of Chinese guys in arrivals who were pointing a camera her direction and seemingly taking her photo. No biggie, she thought, and just thought it some weird coincidence. However, the next morning she left her room early to use the hotel gym, but doubled back upon forgetting her headphones and spotted the same Chinese guys outside her hotel room door trying to jam something in the lock.
    - fakedang 1y ago
      Nah, that's just an anecdotal incident you're extrapolating for the rest of the Middle East. And speaks more about Chinese business (espionage) culture. As for telcos using Chinese equipment, nearly every country outside the US, CANZUK, Japan,SK, India and EU use Chinese equipment.
abdulhaq 1y ago
what has family values and uniqueness got to do with corruption?
- bigbacaloa 1y ago
  [dead]
- ulfw 1y ago
  What do those have to do with running a successful tech company?
ulfw 1y ago
> offering something genuinely unique in a market where exclusivity matters That's the biggest joke for everyone who has ever dealt a tiny bit with the tech market over there. If China is me-too of US tech companies, South East Asia is me-too of Chinese companies and the Middle East is me-too of South East Asian companies. Think Uber -> Didi -> Grab -> Careem there is nothing 'genuinely unique' or 'exclusive' by having the same product and business idea implemented four times over. Yes each one has added significant local touch and flavour to it but... unique? Exclusive?
- petesergeant 1y ago
  Interestingly I have found Careem to be significantly better than Grab, which is significantly better than Uber. That said, Amazon is much better than Lazada which is much better than Noon…
fakedang 1y ago
As someone who does business in Dubai, huge no! The key is in the top part of the statement - prestige. Your local partner wants to be seen as investing/using the latest and biggest technologies, whether it's AI, Salesforce (even for 100 person companies), AWS/Azure (even for tiny use cases that could be done via Office automation), Workday, Oracle and SAP, etc. The locals want to be affiliated to those technologies as it's a matter of prestige for them, even if they won't even be touching that tech with a long pole in reality. You make money in Dubai selling solutions, not SaaS, selling association and media presence. As for Dubai's data infrastructure, government mostly works with Azure and uses the Indian WITCH companies as their implementation architects. EDIT:- sometimes it gets so hard trying to convince the local partners and company execs why they don't need to use the "name brand" Salesforce CRM or the " hotshot" Oracle database, but huge caveat - if the top leadership of the company is young (think millennial scion of the founder), there's a huge chance they too will see it as futile and agree with you to swap to something more modern. Younger middle management locals are still the same - they care about the prestige factor more than actual results.

pm90 1y ago

> Here, the market demands you come dressed in a tuxedo, not the jeans and blazer that passed for formal back home. Your packaging, your experience, your digital presence – everything needs to exude a level of sophistication that would seem excessive in most Indian markets. The gist of the article just seems to be that the business environment in Dubai is (shocking!) different from that of India, with people needing different things. I don't quite understand or agree with the "competing with the best in the world" though, it just seems like the money people in Dubai just expect you to be better dressed, more presentable, and form a personal relationship before business deals.

dyauspitr 1y ago
No, what they’re looking for is fundamentally different. They don’t want better solutions or lower cost or greater efficiency. They want something that enhances clout.

jakelsaunders94 1y ago

I find articles like this super interesting, but they remind me that I’m a deeply technical person and as such would never be able to thrive in the ‘business’ world. The modern YC startup philosophy of ‘make something people want’ seems to be only partially true. There’s this whole world of coffee dates, relationship building and salesmanship which always feels slimy to me.

cornfieldlabs 1y ago
Yep I'll never succeed in a world where I have to "dress the part". Luckily this is an era where it doesn't matter much
- sandeep1998 1y ago
  Do you run a business?
  - cornfieldlabs 1y ago
    Not yet :)
  - esperent 1y ago
    Yes. I never play fancy dress with suits. Formal for me means a nice, comfortable shirt and jeans or other clean trousers. On an average day I wear shorts and sandles because it's damn hot. I wear suits to funerals, and once to a wedding, but even most of the weddings I go to have a "smart casual" vibe them, no full suits required. I rarely meet with investors or anything like that, but when I do, not dressing up is a test. If they judge me for what I wear, beyond basic cleanliness, we're not a good fit for working together.
    - gsky 1y ago
      Wearing suits in a desert?
      - 1y ago

Oras 1y ago

The article is an example of someone who didn’t do their homework of research. How do you fly to a new country to establish a business without researching it, understand the culture, how business is done? The other point of “networking”, I don’t know how you could even make a business without networking, why this is shocking to OP?!

alephnerd 1y ago
To be brutally honest, FortyTwo VC is a low-mid tier early stage investor in the Indian market. There are better angels and early stage funds in India, but these guys couldn't differentiate themselves in the now increasingly competitive Indian VC scene. The cream of the crop of early stage startups in India tend to go to YC, Peak XV, some university alumni network programs, Antler, and a couple others.
- gsky 1y ago
  All YC startups are crap these days
- FlyingSnake 1y ago
  That seems to be a fair assessment. I’ve never heard of fourtyTwo and had to double check who they are.
petesergeant 1y ago
> The article is an example of someone who didn’t do their homework of research Yes, and as a result it’s interesting and informative.

alephnerd 1y ago

Unsurprising. Dubai investors (Khaleeji, Indian, or Russian) are looking for a "dhandha" - not a business. Any story that can't be easily translated into an "arbitrage" or "commodity" play just isn't going to land with them. Abu Dhabi has fairly good growth stage investors, but that's also because they tend to let the money managers and investors remain in London, SF, NYC, etc. You're better off remaining in the Indian market, or if you want deal flow abroad, then building relationships in the US, ASEAN, UK, or Australia unless you're a "VC" who's trying to land a Dubai Golden Visa in order to evade taxes back in India (these kinds of personas tend to overlap with the kinds who run real estate or export/import "dhandhas" back in India).

dyauspitr 1y ago
What is a dhandha? Like a way of life that is a business?
- severnaya123 1y ago
  The literal translation is "business". But the contextual meaning here is closer to "arrangement/understanding". In India the word sometimes refers to underhanded/corrupt practices (there's a bollywood song where the lyrics go "sab ganda hai par dhandha hai ye", which can roughly be translated as "it's shady work, but that's business") With that said, I don't really agree with the parent comment here, but I don't know enough about business practices in Dubai so I may be wrong.
- SanjayMehta 1y ago
  Literally it means “trade,” but in reality it means hustling. Real life example: a petty smuggler I knew had his younger brother run the shop, while he himself ran the “dhandha.” This was in the 80s when buying original CDs and Nike shoes needed you to know the right shop in South Delhi. The elder one knew all the Hong Kong and Singapore dealers, the right customs agents while the younger just sold the goods.
  - deleted 1y ago
    [deleted]

petesergeant 1y ago

Interestingly I’ve seen what felt like almost a directionally identical article written about Dubai -> Saudi, eg it’s all about building the personal relationships first, but even more so

anovikov 1y ago

Why doing so if they can do it in US where there's little to no bullshit of that sort, and way more investment dollars than in Dubai?

shash 1y ago
Actually, there's a lot of investment dollars in the mid-east - maybe more than in much of the US, and it's actively looking for good ideas. Also, for certain types of business, the environment is probably more conducive there than in the US...
bigbacaloa 1y ago
[dead]
petesergeant 1y ago
> can do it in US where there's little to no bullshit Hahahahahahahahahahahahaha. When power structures are theoretically eliminated, they’re simply harder to navigate.