Building 1 million businesses by 2030 - Vikram Bharati, founder of Draper Startup House for Entrepreneurs

Vikram Bharati is the founder of the Draper Startup House, which is on a mission to invest in ONE MILLION entrepreneurs by the end of 2030.

Draper Startup Houses are business innovation hubs with a backpacking environment and access to venture capital for global entrepreneurs. Their current locations include Singapore, Bangalore, Estonia, Yangon, Manila, Lisbon, Chiang Mai, Bali and Austin, Texas.

Visit Draper Startup House at draperstartuphouse.com and join our emerging markets community on LinkedIn at https://www.linkedin.com/groups/13949631/ .

Subscribe and follow the INSEAD Emerging Markets Podcast on Spotify,  Apple, or Google.

Chapters

• 2:40 Backpacking post-MBA
• 8:10 Figuring out what to do post-MBA
• 12:50 Finding your mission/purpose when you're lost
• 16:20 Draper Startup House's ambitious goals
• 22:07 Why Emerging Markets
• 35:36 Covid's impact on VC/global fundraising

Transcript

Vikram
Starting Draper's startup house was sort of a culmination of a bit of a soul searching trip that I did, post post business school, I at the time was, you know, a professional working in banking. And I was living in Los Angeles, working at JP Morgan had a great, great career and great life and great friends. And it was it was it was it was almost sort of like too good to be true, in terms of, you know, the privilege that I was in, but there was sort of a very nagging voice deep inside, that really wanted me to get out of my comfort zone and really explore the world a lot more than just taking vacations, and, you know, seeing things on the screen. So I decided to do a bit of an adventure travel, and went down to South America was doing a lot of hitchhiking and couchsurfing and, you know, staying in backpacker hostels. And it's what was supposed to be sort of six months of this, this adventure travel ended up being two years of me, really just roaming around the world and having a time of my life, and really discovering a lot of new cities, new countries that I would have never gone to making friends all over the world. And just being on my own. And I think that was sort of like the, the secret was traveling on your own. confronting the unknowns, the predictabilities, the chance encounters all over the world. And that's sort of what led me to, to Singapore, where I've been living now for almost five years. I met my, my wife now, we have two kids met her while I was traveling. And yeah, we're settled here. And when I when I moved to Singapore, you know, I certainly was a much different person than when I had started my trip years before. And I wanted to really get involved in things that were interesting to me. So I was very interested in venture capital. I was very interested in startups as very interested in cross border. businesses, I was very interested in new emerging markets. And I was very much interested in adventure and exploring doing business in, in countries that that usually are not sort of on the radar. And so I decided to start a new sort of a hospitality concept, which was essentially taking the backpacker hostels and converting them into almost sort of like innovation houses, where there would be a complete sort of business ecosystem that would be layered on top of the spaces. And what started off as an experiment, you know, grew from being an experimental, a little bit more than an experiment. And that was three years ago. And now we have spaces in we're 15 spaces all around the world, you know, including South America, the US, Europe, and Asia. And, yeah, we're, we're sort of, you know, taking the punches of COVID. And trying to figure out how to navigate the business, find new opportunities, and continue to stay optimistic and grow, as well as really trying to pin down our identity as a business and what we really, you know, who we really are, because that's always in the flux in that early stage company like us. But we're going with Flo and having a good time doing it.
Nick
Yeah, very cool. I have many questions that I'd like to ask from, how you met your wife and to what you're doing now. But I guess, the one that I think that may be most interesting to me is a bit about how that trip really inspired you I, you know, I always have thought, like, if I have a child, I would much rather, you know, give them the money that they would spend on college instead and tell them you know, just read the books that you read in college and then travel the world for a few years. So kind of curious was it you know, the backpacker culture of meeting, you know, people from all over the world or being outside of your home country, and that gave you the time to, you know, see things in a, in a different light or learn more about yourself, just, you know, spending time kind of, on your own in charge of your life. So curious? And in general, if if there was, you know, one aspect of traveling that helped you, you know, come to this mission and find your purpose, or was it a variety of factors that all kind of came together?
Vikram
Yeah, no, it was it was certainly it was, certainly the travel was a huge component of sort of my journey, and just the mechanics of going to new places, meeting new people seeing new things, having new experiences, so that there's definitely, that was a huge component of sort of opening the world opening up to you or you opening up to the world. And realizing that there's, you know, definitely a lot more out in the world than then sort of usually the bubble that we live in, in our day to day, you know, day to day mechanics of our life, no matter where we live. And so it's always nice to be outside of your environment. So there's certainly that component. But I think just on a personal note, I was I was sort of searching for the next thing in my life. And I was sort of lost. On a personal level internally, I was sort of lost in terms of, I don't think I had the right direction. the right direction of where I wanted to take my life. Because, you know, you're in business school, you realize that most most students graduate from Business School, which which was my case, I went to USC, Marshall School of Business, did my MBA. And generally I find that a huge group, a huge, not everyone, but big majority of recent MBA grads generally go into a direction that everyone else is going into, which is not a bad thing. But but I find that a lot of times, if you actually really talk to a lot of these students, they go in that general direction, because everyone else is going in that direction. And it's not a bad direction to go into. But generally, a lot of folks don't have their own sense of direction that they want to sort of achieve on their own. So it becomes sort of like a consensus direction like, Hey, you know, you go into these industries because they pay well and you know, there's prestige, and then there's a good lifestyle, and there's all great things. We're very privileged to have those options. But I the internally, I was lost in the sense that Even though I was in that direction, it was not really the direction that I wanted to go into. And, and the truth was, I didn't really know what direction to go into. And that was the, the idea of being lost was I didn't know what direction to go into. And so me sort of putting myself out in the universe, throwing myself out into random places to sort of search for that direction that I wanted to go into, was a great adventure. Because, you know, I'd go to St. Berlin, and I'd meet all these great people doing different things they'll give me ideas are, I'd go to Peru and meet, you know, all these people doing different things. And that gave me some inspiration and ideas. Or, you know, I go to Indonesia and meet all this folks doing different things. So I think that the mechanics of traveling and seeing new things, as a search function, you know, you're searching for inspiration, searching for things that inspire you and searching for things that may interest you to take a find a direction, I think the combination of that to those two things that personal search, as well as the mechanics of physically being in new places, was extremely, I think, sort of fulfilling and helpful. And now, now, I think I have a much clearer sense of direction, and understanding of what I want to achieve in life and things I want to do. And so that travel bug that I had, or that sort of like been that he has been scratched, and I kind of feel that I don't necessarily have to ever, like, you know, do any more sort of solo backpacking anymore. Because I've done it, I've kind of feel like I've sort of seen a little bit of the world. And so I feel like I feel now I can sort of focus on the, you know, the directions or the direction that I have found to take my life into. And so that's nice, it's nice to have that sense of almost sort of sense of like, okay, I kind of know where I want to go. And I've seen the things that I might have been very curious to try and do, but I don't need to do that anymore, because I've done it. So I don't know if that answers the question.
Nick
Yeah, that's, that's a great answer. I think it's a, it's a very important point on as you know, I, I'm finishing the finishing up the MBA right now. And, you know, a lot of my my classmates were all, you know, around the age of 30. But we're still kind of still figuring out what we want in life, and a lot of the careers we're looking into on our about maybe just increasing optionality because we're still not sure which direction to take. So I think that on, it'd be interesting to know, if you have examples of, you know, how stepping out of your comfort zone that way, and I'm taking a personal journey would be helpful for someone because I think a lot of people in this stage, whether they're MBAs or other people who know that they're not where they want to be in life, but then there's a fear of, you're taking the plunge and doing on something that's more meaningful for them. And a lot of people may not even know what they want to do. Like they think, you know, I want to do something more meaningful, but they don't even know what it is at this stage. So if you could talk a little bit more about that, that process of how it helped you reach that stage? And if you have any personal examples of how you're traveling led to you reaching the stage, that'd be great.
Vikram
Yeah, definitely. So I think one of the important things that when I look back at my, my journey, I think one of the things that helped me was just embracing being lost. And, and, and realizing that there's a lot of power in being lost and not knowing, I think a lot of times, I used to, I used to be lost and not, and not have a direction, and I would panic. And you know, when you're surrounded by very competitive MBA type folks, and everyone's everyone seems to have their life figured out and you don't, you know, it becomes you becomes a product of your environment in the sense that there's a lot of pressure. And there's a lot of, I guess, eyes that that are looking at, you know what everyone else is doing. But I think there's really a lot of power in being lost. And then there's a lot of embracing the unknown and embracing that you don't have the right direction is actually a very good thing. It's not necessarily a bad thing. And once you realize that, not Knowing what you want to do, is, it's a tremendous opportunity, it's a tremendous potential. Because you can kind of start from scratch. And I think if if you're, if you if you're not happy with the direction that you're going into, but you sort of just go in that direction without the awareness that this is not the right direction you want to go into, then you end up, you're, then there's no way back, right, you sort of like go down that route, and you continue to go down that route. But I think being aware from the very beginning of being lost, being aware that you don't know that being aware that you don't have the direction, I think it's a great possibility. Because now you can actually go and seek, seek it out, and then find the right thing. That that may make you, you know, bring fulfillment to you. So that's the first thing, just embracing, embracing the being lost and finding a lot of potential and being lost. And I think the second thing is really trying out a lot of things. And so when I was traveling, I tried a lot of things, you know, I tried building a lot of different things. I tried working a lot of different projects, you know, volunteered and a lot of different things. And so essentially got my hands dirty in lots and lots of lots of different projects, and in lots of different countries, with lots of different types of people. And I think that just trying lots of different things gave me a sense of you know, what I like to do what I don't like to do, and, and so when I sort of like started my thing, it was a combination of me having tried lots of different things, and I kind of knew what would work and what would not work for me, because a lot of the things that I tried, some of them really, really failed, some of them were successful. And so just trying lots of different things, I guess in especially if people are in their early 30s, or you know, just graduating Business School, there's plenty of time. Yeah, it's such a it's a really good time to travel and see the world and experiment with lots of different things.
Nick
Definitely, and, um, I guess now I'll get more into questions about the business itself. Maybe you could tell us a bit about, you know, where you are now, with Draper startup house and what plans you have for you know, the the mid to long term future, like what your ultimate goal is, along with any other projects you're working on, whether they're directly related to the star house itself, or what else may be going on, because I know you did mention that you're doing a few other things as well as just the, the the chain of co co living and co working spaces.
Vikram
Yeah. So ultimately, our our mission with the company, what we really want to achieve in the next 10 years, is we want to help build a million businesses around the world. And that's, that's our company's mission and goal. We, we have a very long ways to go. But we we, we believe as a company, and I believe as a person, that the most powerful thing that we as humans in the world have is the idea of creating an idea of entrepreneurship and building a business. And I think this idea of building businesses, creating opportunity, innovating, finding solutions to problems, this is a very, very powerful tool. In fact, we think this is the most powerful tool that we in the world we as humans have. Because the idea of entrepreneurship and the idea of solving problems and creating new things. Is is, you know, is something that can solve most of the problems that we have in the world, whether it's environmental, whether it's you know, economic disparity, whatever the problems that come around in the world, you know, whether it's pandemics, the idea of entrepreneurship is the most powerful tool to sort of essentially solve a lot of these problems. And so that's, that's the thesis that we have. And we want to build a global business ecosystem, which will then result in us helping to build a million businesses around the world and it's Sort of a lofty goal, an ambitious goal, but I think it's very doable, because, you know, there's the world is very big, and then there's billions of people and so a million businesses, it's, you know, scratching the surface really. So that's, that's the goal. And the way we want to achieve that is we want to build a brand that has essentially, we do four things in the company. One is hospitality services. So we think that as people travel, they need a place to stay, they needed a place a place to work. So we're going to create this physical hubs around the world. So we call it a hospitality services. And it consists of in hotels, hostels, co living spaces, shared spaces, lots of different physical types of spaces. And the second thing we do is education. And so we have a sister company called Draper University, which does a lot of acceleration and incubation, both online and physically and a lots of different education programs around the idea of you know, how to build a business. And so education around simple things like how to raise money, how to how to, you know how to find co founders, etc. So so that's the education piece. And then the third thing we do is we help people raise money. And so the investment services is we currently have a global syndicate, where we have, you know, hundreds of investors from all around the world 1000s of companies all around the world on this platform, and everyone's being matchmade. And then, you know, raising capital, a cross border, global, it's a global syndicate. And the fourth thing we do is business services. So we have an arm that does technology outsourcing. And so if you are a company that's looking to build an app or a website, or you know, a CRM system, we can, we can do that. Also, the other service we do is market entry. So we help companies enter new markets. And so right now we're working on a project, where we're helping clean tech businesses from Finland to enter into the Malaysian market. And so that's, that's, that's a service that we provide. And we want to continue building different products within that service suite. Within the investments side, we're about to launch our own fund, where we have commitments from investors, where we will have direct investments that will put into companies that come into our ecosystem. So the combination of all of this is a complete business ecosystem. And we, you know, hope to continue to grow this our goal, or our sort of goal is to have physical spaces and our brand in 100 countries over the next 10 years. We're currently in 12 countries. So we have a long ways to go. But we want to build a hospitality service that has a complete innovation, entrepreneurship startup ecosystem on top of it.
Nick
Yeah, that's, that's really amazing on and looking at the website, it seems that many if not, the majority of your locations are in emerging market countries. I'm just curious why you chose these locations to operate out of First of all, and secondly, maybe what you think the potential is for this sort of entrepreneurship that you're hoping to spur in solving the problems in these these countries as they as they grow and develop?
Yeah. So you know, I've always sort of struggled with the with the term emerging markets, because I don't really know what that means. And I know there's lots of different definitions of what an emerging market is. There's like an economic definition. There's a banking definition. So, so I've always struggled with that means, but but I suppose emerging markets is sort of the textbook definition of a developing country recently emerged, I suppose, then then I you know, you could say that 90% of the world is emerging markets, you know, that or at least 90% of the People's, the world's population lives in emerging markets. So I think emerging markets is the status quo and emerging markets, the developed markets are the outliers. And so most of the world is emerging that sense. So it makes a lot of sense to sort of focus on you know, where the critical masses in terms of creating opportunities for people. I suppose if I had to give an example of an emerging market that we were in, but are not in anymore, is, you know, we were in Myanmar with is a, an extremely, I've probably on the other end spectrum of emerging markets, you know, they completely closed off to the world for the last 50 years and sort of opened up now, five, six years ago and have now gone back into being a sanction country and the close country because of the military coup. And so it's a country of 60 million people. And there's a lot of young people who are, you know, educated and looking for opportunities to connect with the world. Everyone has the internet and smartphones, and they're there, they're seeking to grow out of, you know, their, their, their past. And so there's a lot, there was a lot of optimism and excitement about this country coming out of 50 years of isolation, to now open up to the world, which just means 60 million more brains plugged into the Internet, and who knows what kind of ideas would come out of that, that that country. So that's a, that's a sort of extreme example of an extremely emerging country. But you know, I gotta say, it's, it's really fascinating to be in countries like that, because you realize that most of the world is like that, and, and that you and I, you know, who have the privilege to go to great business schools and, and, you know, have passports from countries where we can just jump on a plane and go somewhere, that's a very, very small percentage of the world's population, and most of the world are our people like, in our community, and in young gone, that are young, hungry, kids who want to see the world who want to build things, who want to have the opportunities to, like we had, and I think if we can provide and build that infrastructure to sort of connect the world, like them into a business ecosystem, you know, it gave us a lot of fun point of pride when we were helping young startups from Myanmar, raise capital from VCs in Silicon Valley. And, and that, that that is, you know, I think, if we can actually do that, around the world, where flow of capital can go wherever there's talent, where there's good opportunity and good business ideas, I think the world becomes a better place. And I just feel that if everyone's focusing on Silicon Valley, focusing on San Francisco and New York and, and Austin and London and Berlin, and Amsterdam, is a very small percentage of the world's population. Well, what if you could flow capital into places like, like, you know, like, like, like Myanmar, I think it makes the world a better place. So I guess part, part of the reason why we're in emerging markets is because of that sort of thesis, more from a macro perspective. But also, I think it's just fun to be in emerging markets. I like adventure. And I like being in places that are not so developed. I mean, I live in Singapore, which is an extremely developed country. I'm from Los Angeles, which is, you know, a part of a developed country. And, and so it's nice to be in places that are different, where there's a lot of work to be done.
Nick
Do you have any favorite countries to spend time in ? Is it whether it's the ones that you're operating in? Or just for fun? Are there any emerging market countries that you find yourself going back to on it over and over again, just because you you enjoy spending time there?
Vikram
Yeah, well, I I certainly, I certainly like Indonesia a lot. But I, we have a space in Bali, which is sort of a digital nomad hub. In the world, a lot of digital nomads around the world come to Bali, because it has, you know, the rice paddies and coconuts. And it's a beautiful place. So I certainly like going there. But the country that I actually find very fascinating that I go to, I suppose I haven't gone to in a while because of the pandemic. But where I would like to go next is is Estonia. And Estonia certainly is. I don't think it's an important part of the emerging markets because they're part of the European Union, and it's a developed country. And but the reason why I find it fascinating is, first of all, not many people know where Estonia is because it's such a small country. It's a tiny, tiny pin, you know, on the map. Has 1 million people as a population, so it's tiny. It, it was post Soviet. So he was part of the Soviet Union, it became independent in 1990, which is 30 years ago, just really not that long ago, right? If you think about it, and now they're one of the most in the entire world, they're one of the most digitally savvy country, everyone votes with their phone. So the voting system is completely digital. They have this thing called the E residency program, which, which basically opens up their, their government infrastructure to anyone in the world. That's, that's not from Estonia, which is fascinating, because then companies can set up their remotely all remotely, you know, set up a eu company pay taxes, and in Estonia, so they're doing amazing, amazing things that have the most startup unicorns per capita in the world. For a country of 1 million people, I think they have six or seven unicorns, Skype came from there. transferwise came from there. And so they have a lot of success, which is fascinating. But what I find most fascinating is how they were able to so quickly, since becoming independent in 1990 been able to achieve this so quickly. And I think that that's fascinating. And it has, I find a lot of similarities between Estonia and Singapore, because Singapore is also you know, from a, from a geography perspective, small place, small population. Not a lot of natural resources, but they've had a great success for for a new country. And they've been able to achieve and become a global player in a short amount of time. And and Estonia has done that as well. So when you look at this small countries with such checkered past and past that, that that have been not so favorable for for these countries, to then essentially emerge so quickly and become these great success stories, then, so you have to ask, you know, why is this? Why is this the case? And if they can do it, why can other countries do it? And so I find Estonia to be extremely fascinating. That's why we have a space there. And, you know, I hope to to be more involved with things over there.
Nick
Yeah, it's a it's a pretty cool place, I actually had to write a report about startup ecosystems for one of my internships, and it was basically focused on Estonia, Singapore, Israel, and Portugal, I guess, but just this can be edited out, but just out of curiosity, of when looking at you, maybe some of these less developed countries around the world. Do you see any that you could predict becoming the next Estonia based on, you know, policies that they're trying to put in place now? Or are there any, you know, of income mean countries that you think might be able to achieve this success based on what you're seeing in those places?
Vikram
Yeah. So there are, there are countries in Europe that I think are going to be very interesting countries that are sort of like Eastern, Eastern European bloc. I think the countries like Georgia, the country of Georgia, not not the state of Georgia. There's a lot of interesting things happening in Tbilisi. We're actually about to launch developers co living house in Tbilisi, where we're bringing junior developers, they live in the house, and we help them get to the next phase of their development journey, I think so countries like that small countries, that they're doing some very interesting things. I think, you know, Lithuania, Latvia, there's a lot of technical talent in those countries. I think there's gonna be some great things that come out of there. And, you know, they just pull up hungry, talented people who really just want to participate in the global economy. And they've been because of the political situations and the leadership, you know, they it's been hammered down. But I think so, Eastern European countries that are not part of the EU, I think. I think there's gonna be a lot of opportunities there. I think in Asia. You know, I think Korea is interesting, though Korea is a very developed country. I think Vietnam is very interesting. I think they're emerging country, but I think Bangladesh is actually a very interesting country. You know, they, they, I think there's a lot of manufacturing going to Bangladesh. There's a lot of tech technical talent coming out of Bangladesh. There's now capitals slowly flowing into Bangladesh. I think that's that's an interesting country to watch. I think Pakistan is a very interesting country to watch. You know, our main investors, Tim Draper, and he's now starting to make investments in Pakistan to build the there's a lot of technical talent. I think Sri Lanka is actually a very interesting place, just because there's a lot of technical talent being developed in, in these countries. And they're all very hungry to to sort of really no succeed. So yeah, those those countries, I think, South and Latin America. It's a place to watch. Especially, you know, there's been some successes in Brazil. And I think Colombia is interesting. So yeah, a lot. Lots of lots of countries. I mean, I think in Africa, I think clearly, there's Nigeria, that's showing a lot of promise. And there's a lot, a lot of activity going on there. And a lot of the big companies like Facebook, Google, they're setting up shop, they're, you know, trying to foster the technical development there. A lot of cool stuff with crypto happening. So Nigeria is really cool. I think Nairobi is interesting. So yeah, lots, lots lots of interesting countries to watch for.
Nick
For sure, it's it's pretty exciting to, I think, on, you know, in the past, there was a way of looking at the developing world as a certain way, but like now, when you see that there's companies that they're actually developing and working to, you know, attract talent or attract capital different ways. It's, it's pretty cool. I did a recent interview with a few guys from Bangladesh, and it's very, very exciting growth happening in that country. On Yeah, I'd be curious to know a bit more about on maybe your fundraising process in general, and how it may have different, you know, being located here in Asia and in emerging markets in general, as well, as you talked a bit about how you're also helping some of your startups and these countries, do fundraising, and then more particularly, I'd be curious to know how you got involved with Tim Draper and how the relationship has been and how it's been working with them to build this, the stream.
Vikram
 Yeah, so I, you know, in terms of flow of capital, I think the last year and a half, during this pandemic has changed quite a few things, I think capital is now flowing a lot more cross border than and I'm talking about venture capital, and not your traditional, you know, private equity type of capital, it's that sort of venture capital, I think, is starting to flow a lot more global. Because in the last year and a half, a lot of the venture investors have been doing investments remotely, you know, so I think it's opened up the floodgates where, if you can sit behind a laptop and make investments anywhere in the world, or make investments within the US, then why not, you know, the next country that country over because capitalism, it's all digital anyways. So I think that that's really changed the dynamics a little bit where now money starting to flow, globally, from, from the, you know, from generally where a lot of the investment generally comes from. And so that's that that's an interesting dynamic. And secondly, I think, just because of, you know, transparency, of, of technology has allowed people to connect, you know, the talents to emerge. So if you're a talented person with the company in Pakistan, I think you can catch the eyes of people anywhere in the world, you know, through Twitter, or through just YouTube or whatnot. So I think that that the, the borders have come down a lot more over the last couple of years, I think investors have become more comfortable with taking more risks globally. And so I think this is a very exciting time. If you're if you're, if you have a business that is needs capital, and it's a good business, or you have you found, you know, you found a market or business model that's unique. It's a lot easier to raise capital now than it was I would say, even three, four years ago. So and I think I'm a good case in point that that I'm a good example of that because, you know, I started this company three years ago, and my first investor was in from Singapore. Cuz I actually worked at a small venture capital fund. And so they put in the first check. But then since then the investors I've gotten on board are from, you know, the Philippines and, and, and Estonia and, and Silicon Valley. So investors that come from all over the world. And, you know, our what we're doing is not really venture backed, I mean, it's not generally a venture capital type of business. This is it's not that hot, you know, 100x growth and 100x scale that venture money looks for, but I think we're, we're experimenting with something new and trying some new business model. So I think that's, that's probably why people have taken a little bit of interest in us. But if I can, if I could sit in Singapore and raise money from, from, you know, from well known investors, then I think sort of anyone can really do it. And the way we got introduced to Tim was, so I guess serendipity and right time, right place, doing the right thing. And so, you know, his team actually approached us, because what we were doing was, was interesting to them to sort of build take that Draper ecosystem and and proliferated around the world, so that we could potentially have been a good vehicle to do that distribution. And so that's probably the sort of the main reason but I think people like Tim are investing all over the world. And they're investing in, you know, interesting, unique ideas. So I think, I think anyone can do it.