New research shows that it’s home-grown entrepreneurs who are champions. Having survived harsh operating conditions, they outperform entrepreneurs with a foreign pedigree used to working in an environment of abundance. Government, please note
There is an old joke about Harvard: how do you know someone went there? Don’t worry, they’ll tell you.
India has its own version of that joke. You can usually tell when a startup founder studied abroad because it comes up early and often—Stanford, MIT, Berkeley, Wharton, or, failing that, a fellowship or accelerator like Y Combinator or Thiel, typically delivered with a minimalist logo and maximalist confidence.
Handy proxy is the noise
For years, this signalling worked remarkably well; investors leaned forward; pitch decks seemed smarter; valuations expanded; media profiles followed. A foreign credential became shorthand for entrepreneurial quality, a convenient proxy in a noisy market.
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Here’s the problem. When you line up India’s most successful startup founders of the last 15 years, that credential advantage starts to look… underwhelming.
Let’s start with the obvious names.
Look at the evidence
Nithin Kamath built Zerodha into one of India’s largest stockbrokers without a foreign degree, without venture capital, and without an accelerator logo anywhere in sight. Vijay Shekhar Sharma built Paytm after being rejected repeatedly by investors who thought he lacked the right pedigree. Bhavish Aggarwal built Ola after dropping out of IIT Bombay, not Stanford.
Sridhar Vembu complicates the neat categories. He did earn a PhD in the U.S. and worked in Silicon Valley before returning to India. But his success had little to do with Valley playbooks. Zoho was built by rejecting them—eschewing venture capital, avoiding blitzscaling, staying profitable, and building quietly from rural Tamil Nadu. Vembu’s story is not a validation of foreign credentials; it is a rebuke to how those credentials are usually used.
Add to this list Falguni Nayar, who built Nykaa after decades in Indian finance without a foreign tech pedigree. Deepinder Goyal built Zomato out of Delhi, not Palo Alto.
My friend Ritesh Agarwal sits in an awkward middle category that actually reinforces the point. He dropped out of college in India, learned entrepreneurship on Indian streets and inside budget hotels, and built OYO by iterating locally at breakneck speed. Yet he continues to invoke his Thiel Fellowship, as if that credential needs to be stitched onto a story that was already working perfectly well without it.
When foreign degrees didn’t matter
Now contrast that with the parade of returnees who arrived armed with foreign degrees, Valley résumés, and accelerator badges. Many raised money quickly, and many made headlines. But very few built companies of comparable scale, profitability, or durability. I won’t name them because I don’t want to piss off my friends too much.
The foreign degree didn’t disappear. It just stopped translating into dominance.
Research disproves conventional wisdom
A new study I co-authored with UC Berkeley professor AnnaLee Saxenian and Indian Institute of Science colleagues M. H. Bala Subrahmanya and D. P. K. Muthukumaraswamy, published by the Observer Research Foundation, takes a close look at what actually happened when Indian founders built technology companies back home.
The findings surprised me. They ran against my assumptions and, to be honest, were not especially flattering to people like me.
For decades, the prevailing belief was straightforward. Silicon Valley trained the world’s best founders, and when those founders returned home they would carry hard-won knowledge with them, seeding new ecosystems in America’s image.
This idea even had a name—brain circulation—and it shaped policy, capital flows, and investor behaviour across the world.
The basis for conventional wisdom
Saxenian’s early research showed how immigrants transformed Silicon Valley in the 1980s and 1990s, with Taiwanese and Indian engineers emerging as leading groups within a much broader immigrant wave. When I updated her data in 2009, immigrants were founding more than half of Silicon Valley startups and roughly a quarter of U.S. technology startups nationwide, with Indian founders alone accounting for about 15 percent of Silicon Valley companies. The logic seemed unassailable: if America trained the best, and those people went home, they would naturally dominate everywhere else.
Governments believed this; investors believed it; NRIs believed it most of all—and it further boosted our egos.
India and China built policies around that assumption, offering tax incentives, special visas, and preferential treatment. The message was clear: come back, lead, and show everyone else how it’s done.
For a while, that story held. Then the data intervened.
Details of the research
Our study examined 596 Indian high-tech startups founded between 2016 and 2023 across fintech, healthtech, enterprise software, artificial intelligence, energy, and deep tech. These were not hobby projects or lifestyle businesses; they were serious attempts to build scalable companies.
We grouped founders into three categories: domestic founders with no meaningful foreign exposure, returnees with one to two years abroad, and returnees with more than two years abroad. Two-thirds of these startups were founded by purely domestic entrepreneurs—no foreign degrees, no overseas work experience, no Silicon Valley stints to reference. Long-term returnees accounted for 180 startups, while short-term returnees accounted for just 21.
That distribution alone challenges a deeply held narrative. The performance data makes the challenge impossible to ignore.
Returnees did enjoy real advantages. With their contacts and foreign pedigree, they raised capital earlier and more easily, enjoyed better access to angels and networks, and showed higher survival rates. On those metrics, their edge was clear—at least at the start.
But the outcomes that define venture ecosystems—the ones investors ultimately care about—came from domestic founders.
Winners are those who survive a harsh operating environment
Every unicorn in our dataset was founded by a domestic team. The highest valuation, roughly $1.9 billion, belonged to a domestic startup. The largest funding round, over $300 million, also went to a domestic company. The only startup reporting more than $1 billion in revenue was domestic as well. Not a single returnee-founded startup crossed unicorn status.
This pattern does not suggest that returnees are less capable. It reflects how different environments shape different strengths.
Domestic entrepreneurs built companies inside markets that impose discipline from the start. Customers are price-sensitive, infrastructure is inconsistent, regulation is unpredictable, and capital is finite. Mistakes are costly, and inefficiency is rarely forgiven.
Founders who survive under these conditions develop instincts that are hard to teach—distribution before branding, cash flow before storytelling, and unit economics before vision decks.
Abundance doesn’t make it easy to adapt
Returnees often bring excellent training and global exposure, but they also bring habits shaped in environments of abundance, including larger teams, longer runways, and a tolerance for sustained losses. That model has worked in the United States because capital was willing to subsidize it. In India, and in most emerging markets, efficiency determines survival.
This dynamic is not unique to India. China ran the returnee experiment earlier, encouraging overseas talent to come back aggressively. Over time, domestic founders caught up and then pulled ahead. Today, companies like ByteDance, DJI, and Meituan are driven primarily by local talent operating at massive scale within deeply rooted ecosystems. Returnees still contribute, but they are no longer the engine.
Role of the US
There is an additional irony here. The US helped create this outcome.
For ages, flawed immigration policies trapped skilled immigrants in limbo. Green-card backlogs stretched into decades, visas remained uncertain, and families lived with permanent instability. At one point, more than a million skilled immigrants—mostly Indian—faced waits longer than their working lives. These were founders, engineers, and scientists whom the US trained and relied on, only to signal that they should not plan a future there.
Many left, not because they wanted to, but because they had no real alternative. We assumed they would dominate back home. Instead, they ran into founders who had been grinding locally for years and had learned lessons that do not appear in classrooms or accelerator demo days.
Government, focus on entrepreneurs who stay back
Which is why my advice to the Indian government is simple: stop being enamoured with returnees like me and start investing seriously in domestic entrepreneurs. Foreign exposure can add value, but it is no longer the source of India’s entrepreneurial advantage. That advantage is being built locally by founders who understand Indian customers, constraints, and unit economics because they have lived inside them. If India wants more enduring companies, it should back the people who never left, never needed validation, and learned the hard way how to build.
(Vivek Wadhwa is CEO of Vionix Biosciences and has held academic appointments at institutions, including Harvard Law School, Stanford and Duke University.)