What began as a promising journey for a small Indian startup in the booming fields of fintech and SaaS development quickly unraveled into a cautionary tale of deception and exploitation. This narrative, shared in a candid post on Reddit by a startup founder, uncovers the darker side of cross-border tech partnerships.
The Promising Start
The startup, a lean collective of engineers and marketers, distinguished itself by aiding early-stage companies with minimum viable product (MVP) development, growth hacking, and digital marketing. Their client base encompassed both Indian and international startups, and their reputation was steadily ascending—until a lucrative offer from Southeast Asian clients changed the landscape entirely.
The Allure of High Payments
In a firsthand account shared by a founding member on Reddit, the startup was approached by clients from Singapore and the Philippines via an online platform. The clients appeared legitimate, eloquent in business jargon, and furnished with detailed proposals. They promised extravagant pay—between ₹3 to ₹5 lakh per month—for relatively straightforward tasks like UI design, frontend development, and marketing campaigns.
Initially, payments were punctual, and projects seemed uncomplicated—at least on the surface.
The Dark Turn
However, as the work progressed, alarming patterns emerged. Informal meetings, whimsically termed “ChitnChat” calls, revealed the true agenda. The foreign “investors” began lobbying the Indian leadership to launch a new venture—without any product or market validation. The enticing offer: a staggering $1 million in initial funding to “dominate the Indian market.”
The dream soon morphed into a nightmare.
Uncovering Unethical Operations
Upon further scrutiny, the Indian team discovered that backend systems were pre-built, leading them to merely re-skin frontends and change domain names daily. More troubling was the revelation that many applications were mere clones supporting illegal or unethical activities. The founder lamented, “These were gambling apps disguised as games, predatory loan apps charging exorbitant interest, and fake crypto wallets. They were designed to exploit users before refreshing their identities.”
When ethical concerns were raised, client responses were dismissive. One project manager allegedly remarked, “Indians love shortcuts to becoming crorepatis. We’re just giving them what they want.”
The Aftermath of Sealing Ties
Consequently, the startup severed ties, but the ramifications were dire. Their online presence, spanning platforms like Upwork, LinkedIn, and their own website, was dismantled. Payment gateways—Stripe, Payoneer, and PayPal—were frozen, leading to the locking of their U.S.-registered C Corporation. The co-founder faced unrelenting pressure to register additional companies to satisfy the demands of the same clients.
Most heartbreakingly, genuine clients distanced themselves, unwilling to be entwined with the emerging scandal. “There is a growing grey market in India,” the founder elaborated. “Fake fintech firms, crypto scams, gambling cloaked as gaming, and sketchy lending operations are exploiting India’s developer talent and existing regulatory gaps.”
A Call to Arms for Entrepreneurs
The internet reacted swiftly to the founder’s post. One observer stressed the importance of legal safeguards: “Limitations of liability. You should never run a client’s company under your own wing.” Another offered a practical red flag: “If they lead with money, slow down. Legit partners prioritize discussions about product, users, and risk. Scammers rush in with inflated numbers to short-circuit your judgment.”
This narrative resonated deeply with fellow entrepreneurs, many of whom recounted similar experiences. “Thanks for sharing this. In the startup realm, scams are rife. We were duped in 2020 by someone promising investment,” remarked one founder. However, some responses were not so sympathetic; one user questioned how the team could remain oblivious: “I mean, how could you not know what they were doing with the front end? Seems like you were fully complicit.”
Though the story stirred frustration over broader systemic issues, it also highlighted the startup team’s commendable decision to cut ties: “Scary to hear this, man. It’s great that you stood your ground and said no.” Concerns were raised about the government’s leniency towards illegal gambling apps, with one user asking, “Why can’t these be banned?”
Conclusion: Lessons for the Future
As this account illustrates, the world of growth hacking and startup dynamics is fraught with challenges, particularly when navigating international partnerships. Entrepreneurs must remain vigilant, prioritize ethical practices, and cultivate partnerships built on trust and transparency to survive and thrive in this complex landscape.
