Dubai Reality Check: An Indian VC's Year of Truth | Hacker News Reader

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

dealflowiq.com

48 pointskoolhead1746 comments

> 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.

They’re looking for partners in money laundering.

Ever heard of the term “hawala?” Originates from this region.

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.

This is a gross generalization of the practice. And apparently it started in India.

https://web.archive.org/web/20161228041941/https://www.treas...

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.

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.

what has family values and uniqueness got to do with corruption?

What do those have to do with running a successful tech company?

> 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?

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…

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.

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).

What is a dhandha? Like a way of life that is a business?

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.

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.

My interpretation is that it's a very laid-back style of business. It's not the startup model of working 12 hours a day battling 5 competitors and trying to hyper-optimize every metric that's used to compute your margin or valuation or whatever else.

Dhandha means I want to waddle in at 10am, have some chai/coffee meetings, make some phone calls, and then waddle out at 3pm (because a couple of "chokras" (boys) who come in at 7am and go home at 7pm run the show anyway). Almost like a niche monopoly where no one can intrude or undercut you because you have long-term relationship-based exclusive arrangements with all the upstream and downstream parties involved. A ton of little businesses that make small components in big things like cars, rockets, or foods/pharmaceuticals are run like this. In fact, I've seen multiple ultra-boutique software development companies (both in the US and India) run like this.

Well, if you're a manufacturer, or a government, hospital or ... manager. Let's say you need to acquire a part. Not something as obvious as a screw, but something very simple. A steady supply of syringes in 5 different sizes, say. A "dhandha" would be when you get a friend of yours produce that part (/software/...), and only buy from them. That friend would have zero expertise making that part, but he creates a business that hires 3 guys to make the part, and the owner has nothing to do with the business other than ... let's politely call it "relationship building". In other words, they spend their time in some hotel lobby with said manager, drinking.

Very common.

A decade of blindly copying YC model has made people forget that businesses are messy and require lots of trust building. Just because you believe in presentations and pie in the sky numbers doesn’t mean the businesses will believe them.

I also found it funny that the article is alluding that somehow India is fast and work gets done in a single meeting.

In Tech Entrepreneurship, it is fairly fast.

The Indian tech scene is heavily intertwined with the SV scene in both capital and talent, so the same norms around running a startup in the Bay Area percolated into the Indian scene.

Accel, General Catalyst, A16Z, YC, Foundation, Bessemer Ventures, etc are extremely active in the Indian market so they do have an impact on norm setting.

> 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.

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.

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.

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

Do you run a business?

Not yet :)

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.

Wearing suits in a desert?

With air conditioning... It's quite a prestige thing to be able to afford the amount of cooling needed to wear a suit in a desert...

> It's quite a prestige thing to be able to afford the amount of cooling needed to wear a suit in a desert...

I don’t believe you’ve ever been to Dubai if you think that cooling here is in any way a luxury. Your aircon breaking in the summer is treated like a health emergency. Nobody is living without aircon in the summer.

Yes of course. I meant as an answer to GP, it's not an issue because the whole society is run on the basis of access to air conditioning...

That's basically what the entire article is about, yes.

Same here. My career situation isn’t looking great, and I haven’t felt truly satisfied at any of the places I’ve worked. I do believe there’s a role out there that strikes a better balance between meaningful work and a sustainable lifestyle—but finding it feels almost as daunting as starting a business from scratch.

There is a gentler version of this that I, a technical person, deeply enjoy.

Trust removes friction. Having an informal network of trusted peers makes everything easier. You get access to expert knowledge, helpful connections and opportunities simply because you're a friend. They also come to you when your knowledge is relevant to their task.

I just see it as another community, except this one is centred around an industry. It's no slimier than introducing single friends to each other, borrowing tools from a friend, fixing a friend's computer or tipping them off when a flat frees up in your building.

In my case, it means that I can call upon the knowledge of an immigration lawyer or a financial advisor for free. It also means that they get dozens of clients from me because they're my go-to experts.

You need to do those coffee dates and relationship building to figure out what (other) people want, so it's not even far removed from the philosophy you quote. Yeah, it's _ideal_ if you're your own customer and you have this intuitive knowledge of the product, but that's actually less common (and needn't be common either). As a tech person, I don't find it slimy (at least, anymore). On the pure tech front, it's a process of finding requirements, which flows into the this whole business conversation side of things.

For example, if you view building a business that people want as a challenge, those requirements will vary from place to place and time to time, so finding that out is super important!

Interestingly, I've always viewed the Indian business environment as one that requires a lot more relationship building than (say) a place like the valley, but this article seems to imply that the UAE probably views us the same way I view the US ecosystem...

This quote (or rather, "notion", since I no longer remember where I picked it up from) has stuck with me for over a decade: ultimately all business is based on trust; you can't encode everything in the contract.

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

Super well articulated! I loved seeing the learning process

Agree completely. Writing was brilliant. Kudos to the author.

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?

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...

> 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.

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?!

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.

All YC startups are crap these days

That seems to be a fair assessment. I’ve never heard of fourtyTwo and had to double check who they are.

> 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.

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