I have been talking to friends who have started companies, I am an unpaid intern in half a dozen of these companies, and I also meet quite a few VCs thanks to “lets exchange notes” catchups, and I can see a stark difference in how VCs used to evaluate founders and markets now compared to a few years back. Previously in SaaS, people would assume that because in India, the team sizes would be lower and costs would be lower, you could price your software lower. This would enable you to compete with foreign SaaS players, capture significant Indian market share, and grow. Maybe you could even compete in the US like Freshworks did.

But now that narrative is over, or at least dying, and many VCs want Indian founders to explain how they will establish a successful US GTM strategy.

SaaS investing is at its lowest (?) globally. The narrative has shifted to AI. And AI agents. Earlier you could argue that your opex will be lower due to lower salaries in India, even though infra cost would have been the same (AWS), but in today’s time the narrative is not lower salaries, but having the fewest employees. Especially in product development. As much so that people are actually showing fewer employees in Linkedin because VCs have started measuring their portfolio companies’ productivity. And sending them memos on how to be AI first. India was always a hard place to sell SaaS vs the US.

The value of an Indian’s time is probably 1/40th of that of a US person. Of course, you can argue this isn’t true for high-value workers. An Indian software engineer might earn around 30 lakhs, which is approximately 35,000 US dollars, while in the US, it might be 150,000, so it’s only ~5 times higher. But people value their time very differently.

For example, if you’re selling some QA automation test suite to someone in the US, they will say, “Sure, this product is saving time for me, and I can’t hire an infinite number of people. I can’t solve problems by throwing people at it. As long as it’s giving me ROI, I would definitely buy it.” Meanwhile, Indians will be thinking, “I can just assign more people to this task.” This approach is very common in India. That’s why many Indians are tired of selling to Indian companies, especially SaaS products. Yes, your sales team will not cost you what a US Sales team would cost, but in India time to close deals will be higher and your ticket size would be lower too. India is a cost advantage market and a breeding ground for lean SaaS is no longer sufficient when thinking about SaaS.

I know some people will get upset when I mention this, including some of my friends. But this is what most VCs want to hear: What gives Indian founders the right to win in the US versus the average Stanford graduate?

If you eventually wanted to sell in the US, earlier you would say, “There is Freshdesk, which is cheaper and almost as good, so why pay for Zendesk.”

But when it comes to AI, if you are an Indian founder wanting to figure out US go-to-market, compete in the US, and have some AI solution for customer support or similar applications, the VCs will ask, “What sustainable repeatable customer acquisition playbook do you have that makes you win in this market?” What’s your GTM wedge? Will you do cold outbound? content? partnerships? What unfair insight do you have? Are you just another feature or do you replace a budget line?

Previously, at the pre-seed stage, VCs would simply back founders who were targeting a large market. Founder pedigree is all that mattered. At seed stage, they might look for some signs of product-market fit. But now, people want to see a detailed GTM playbook and much more depth. Investors are concerned about Indian founders not being able to figure out how to sell in the US, thereby capping the their growth.

In the US, AI companies (in every domain) have probably raised millions of dollars. YC invests in dozens of them every batch. So how do you compete in overheated markets?

I know a founder who is building a product in vibe coding that is better than Lovable. Anyone I have asked to test the product says it is probably the best vibe coding product available. But the competition is Lovable, which has scaled quickly to 40 million in annual recurring revenue.

Again, the question becomes, “How can you compete with Lovable and Bolt?” You need to run paid marketing campaigns, create a compelling narrative, and do far more as a later entrant. Your product being 15-20% better probably does not help enough. If you say the market is big, and even 10% of that market can lead to meaningful ARR, it won’t work too, because the VC will ask for every incremental user evaluating Lovable vs your product, how would they know you even exist. Second why are you in consideration. And finally why would they choose you over Lovable or Bolt. The only option is to raise big. Be as unhinged as the Cluely founders. Become generational marketers. And learn how to get cheap distribution and always be top of mind. Most founders are introverted. They won’t even put out their funding PR. I know, I try my best to change them. But again I am an unpaid intern after all.

You have to tell a story of how you will be able to win against Lovable. Just being incrementally better does not help in today’s competitive landscape. US GTM is hard. A VC friend was joking that you have to turn yourself into someone you are not. Embed yourself in networks in the US. Hustle till you can talk US football (not Soccer) with your potential clients. Say the right things. How can you do that as a founder who probably has not even set your foot in the US? Clay took years to reach their revenue. So did Figma. No Indian VC will wait for you like people did with Clay and Figma in the US.

I know so many founders sitting with 200K USD ARR who are trying to figure out the next steps. VCs will say “Hey look at this US company that grew to 20 million ARR with 10 people in 12 months”, and ask you to spend money, and 3 months later you will realise they got cold feet because of the sector heating up, change their thesis, and say good luck to you and stop responding to your mails. What is worse is the borrowed conviction. A lot of these VCs won’t even use the products of their portfolio companies, so they are just FOMO investing. It is an extremely tough environment out there. And I sympathise with both my founder friends, but also VCs who will have to figure out their investment strategy for the future. Get ready to answer what is your repeatable US GTM playbook in your seed pitch itself. One off contracts, even in the US, won’t help much. You have to show how you can reproduce your sales. ZIRP is over. The only thing we can do is grind.