Running a SaaS business is 4 times cheaper in India than in the US
Hear me out!
I've been a SaaS enthusiast for 5+ years now thanks to the opportunity offered to me by Zoho and Freshworks. Now I've been reading a lot on the principles of a successful SaaS business and was surprised at how one basic principle was ignored, or I should say just was taken lightly.
I am not making this stuff up, I just wanted to cover an angle that is a crucial disruptive turning point for SaaS businesses.
Before I talk about monetary value, let me clarify that I am going to predominantly talk about Software-as-a-Service in the Indian tech market. But before I do, I want you to consider this seriously so here's a link to the Venture Capital Invested into SaaS Demographics in the Indian tech industry and the total exceeds $3 Billion (Thanks to the SaaS-Insider team) so please lean back. Also, all the data that you'll be seeing here are sourced from Glassdoor, so go sue them if you have to.
Covid-19: Need I say more? Everything is sinking, but surprisingly the Tech segment is the only one comfortably floating and even thriving. It'snot just the silicon valley, it's not always about America but it's about the American $$$.
Basic Business Economics 101:
"Economic efficiency is the measure of output obtained with a given set of inputs, i.e. least amount of wastage.Technological ability usually decides the upper limit for the maximum efficiency which can be achieved." source
The maximum efficiency for the operational expenditure is my prime area of focus here. Tech can only thrive in the US is almost an irrelevant statement now, Covid has established that the world is digitally connected enough to deliver solutions from any remote part of India. Remote work is thriving in India, we have easily 4.3 million+ techies enabling the world to function and evolve.
So let's get to the point:
I decided to test our theory, that starting a SaaS startup in India would be cheaper than in the US and we just wanted to confirm by how much.
So there were few rules that we set up, the companies each have been assumed to be 50 members in size, (which is lavish if you compare to actual startups) and we just took 6 teams predominately and according to my personal experience, these are the costliest position to fill and assuming this is a one product/solution startup.
You would want to know what the total of that operational cost and saving right?
Well here goes,
Successfully operating a 45–50 member office (Excluding the rent and infrastructure cost, which differs from location to location in India)
In the USA — $3,480,000 and in India — $561,000 it's around 1/7th the cost of setting up a successful workforce.
Now obviously, we have overlooked some factors like taxes, but which you can trust me India is better in terms of the tax framework compared to India at the moment, at least for companies of course.
But this is the underlying factor that should be driving startups to flood to India, we have the resources, a well-trained army of techies who have found the new founds remote work environments their own.They are also well versed in SaaS technology and the different layers that forma successful business that is easier to scale.