Kevin Owocki, Daniel Osit, and Adam Sachs, all in their late 20s, represent the future of American entrepreneurship. Why? Because they accidentally stumbled on an idea that’s proven extremely appealing to India’s burgeoning urban middle class.
“In January 2010, we made the decision that we are an Indian dating site,” Mr. Sachs says. And now, with almost two million users — and 7,000 more signing up daily — Ignighter is considered India’s fastest-growing dating Web site.
To put it another way, it gets as many users in a week in India as it did in a year in the United States. Next month, Ignighter will open an office in India and hire a dozen local employees. The company has stopped developing its American site, though it remains online.
And as reporter Hannah Seligson goes on to observe, forty percent of Ignighter’s investors are based in India.
Seligson’s article reminded me of Jeremy Siegel’s The Future for Investors, in which he predicts that as the U.S. and other advanced economies age and as emerging economies like India hit favorable dependency ratios over the next several decades, Chinese and Indian investors will purchase U.S., European, and Japanese assets, and in particular brands, at an accelerating pace.
What I found particularly neat about the article is the way in which Owocki, Osit, and Sachs have proven so game to going where the opportunity is, and spending long stretches in India. This willingness to overcome psychological barriers to make a product work seems very admirable, and it might make these guys rich. In a sense, America seems to be offshoring entrepreneurial vigor, creating wealth in far poorer countries.
The hope, from the U.S. perspective, is that this will generate positive spillovers not only for the entrepreneurs in question but for others as well. Different people have different ideas as to how to achieve that outcome. I tend to think that we want to make our cities more amenity-rich while also lowering the barriers to job creation, e.g., payroll taxes and marginal tax rates, implicit as well as explicit, more broadly. Others believe that we should increase taxes and redistribute the proceeds. A potential issue here is how we redistribute the proceeds. Cash transfers to the poor and near-poor are one possibility, and transfers in the form of compensation to politically active public workers are another. Given that the poor and near-poor are far less politically active than organized public workers, it’s easy to imagine an outcome in which redistribution to the latter group is characterized as redistribution to the former group. It doesn’t help that the poor and near-poor rarely have much say in the kind of services being purchased on their behalf by elected officials.