President of most influential startup incubator of Silicon Valley Y Combinator, Sam Altman, is increasing its bid on India by 2x at a time when many sponsors have gone sluggish.
YC, as it is commonly recognized, educated as many as 18 startups in India in 2017, its uppermost ever since it vigorously got concerned with the country a couple of years back. Let us see as to what he has to say.
YC’s 2017 India intake numbers are the highest in any year. How’s that happened?
We have been going to India for the last few years. We’ve been fortunate enough to be an investor in a few of the successful companies in India. These founders talk to the startup community there about us. We see this in all the markets across the world: Once we can get the first few wins in a new geography , that perpetuates in the local community and then people say , ‘Oh, we’ve heard of them, founders said they were great’.
Will you look at setting up an India outpost?
Our goal is to take the 18 intakes in 2017 and keep increasing that number. We have no current plan to open an outpost, but I bet someday we would. That may be a few years off though.
Why are you bullish on the Indian startup ecosystem amid uncertainties?
I like to be bullish when everyone else is bearish. There are very few long-term investors, I think it is a big advantage for us that we are one. Most are chasing fashion or trying to make their LPs (limited partners) happy.
So what’s wrong with the tech investing class?
It is not only about the way funds are structured but also about what they are expected to do that particular year. So if India is hot, they’d be in India. If India is cold, you don’t want to be there. But we are excited and will happily make a lot of money in their absence.
When we met in 2015, a slug of money was coming into India. It’s been tougher for startups to raise capital since then…
We try and not get caught up in what other investors do. The way I look at investing is that, on any given day , what the stock market or any other investor is doing is a random number generator. But over time it does converge to reality . We continue to believe that there is something real happening in India. Like any exciting new thing, there will be ups and downs, there will be bubbles and busts, but we try and take a very long-term view here and not get too distracted by the ups and downs.
You told me during the heady days that you were not as much worried about the eye-popping valuations as you were about the cash-burn across startups. Is it looking different now?
I don’t know the current cash-burn situation at Indian startups. But in the US, in general it feels okay. There are plenty that are burning too much and will die. But on the whole, the burn is relative to the cash on hand, it’s reasonable.