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How Indian Americans Came to Run Half of All U.S. Motels (nationalgeographic.com)
384 points by walterbell 9 months ago | hide | past | web | favorite | 236 comments



The story totally checks out. I moved from Boston to San Francisco in 2006, did a cross country drive. Back then we only had flip phone, so I would use my laptop and The Microsoft Streets software with a GPS. Every day, around 3 PM, I would pull in into the parking lot and locate a Motel 30 or 40 miles ahead using the GPS and Streets software, and call and book a room.

8 out of 11 motels I stayed in were owned and run by Gujjus (Gujaratis, originally from the state of Gujarat in India). I was really surprised by this, because until then, I was only used to seeing East Indians working either in Tech or in Gas Stations, 7/11s.

Being a 1st generation Indian immigrant myself, almost always the owners would relate to me and tell me their immigrant story. And yes, almost all of them said the same thing the story mentions, i.e. borrowing money from family to buy a run-down / cheap motel business, live in it and work on it. One of them even shared their Gujju dinner with me as I'd arrive late and all the restaurants were closed in the Area ( Eureka, CA)...

Not all of them carried the business forward though. 1 guys son was working to be an Airforce Pilot and another's daughter was going to Law School. As told by their fathers neither one wanted anything to do with the Motel business, but they put in their work as kids, working at the motel while off school and such.

After moving to San Francisco, I met another Indian-American "Patel" , born to Indian immigrant parents. He too had a family run motel in Portland and would tell me stories of how everyone in the family had to pitch in to make it work. Gujjus are hard working people and I really admire their work ethics and grit.


My last ex was Gujarati and her father owned a Holiday Inn Express and a Days Inn. We both worked remote at the time and a good chunk of our relationship was spent staying at various hotels under the IHG banner for the "owner's rate" (a small denomination less than $1).

Their network went well beyond any particular industry though. The first family friend to come to this country ended up in Houston in the early 70s, quickly accumulated wealth by innovating accounting techniques for big oil. He sponsored the next wave, which included her father who started as a nuclear plant engineer and travelled around the country for a couple decades before moving into finance then hospitality.

Each successive wave would sponsor others - they all were relatively successful in India but came here to be executives at tech companies, surgeons, professors, real estate investors, etc. They really took care of each other.

While the family did much of what was mentioned in the article, including living at the Days Inn for a couple years at one point, it didn't mention anything about partnership stakes in these properties. That seemed to be a big thing, or at least I had the impression that diversifying property portfolios was common. Her father owned his properties outright but that was because he bought his partners out during the financial collapse in 2009. When we last talked 2 years back, he was looking to acquire new partners and invest in other properties.

As you say, there was a tension to bring the children in but they had little interest in moving to a place in a so-so part of Florida - the children were well educated, travelled, cultured etc and preferred to live in big cities. My ex and I did grudgingly discuss it as being an option if we started a family.


>>8 out of 11 motels I stayed in were owned and run by Gujjus (Gujaratis, originally from the state of Gujarat in India).

I had a Gujrati friend while doing my Engineering in Bangalore. He quit round about the 5th Semester, went to the US to start a Motel. And from what I heard the last he had like a chain. Never returned and finished his engineering though.

I remember starting round about the 2nd semester he would frequently visit the US to see his cousins who ran Motels. He was quite famous in the class that he used to get us all sorts of rare merchandise from the US not available back then in India. I'm talking about the time when a bar of Snickers was like an exotic chocolate in India.

One of things you will see in certain Indian communities(Gujrat, Kerala, Tamil Nadu, Bengal) is a very high degree of community affection and willingness to help their kind.

I heard the family based GC, I guess that EB3 wait times are now like 16 years, largely because once a family comes, they apply GCs for everyone in their family.


The Gujaratis are known for being very enterprising folks. It is culturally respected in the community to have your own business, whether it is a small corner shop or the biggest corporation. India’s biggest private corporations (Reliance Industries) was started by a Gujju. Gandhi and the current PM also hail from this state.


> The Gujaratis are known for being very enterprising folks.

The downside is that some of the biggest and famous crooks are from the same community as well.


If we accept the premise that Gujaratis are particularly enterprising, then unless they are particularly less prone to criminal behavior than other communities we should except some enterprising crooks as well!


There's lots of famous financial fraudsters and crooks from any community. Look at the Ivy League graduates working on Wall Street who caused the 2007/2008 financial crisis.


> from any community

Which is not relevant to this post and the GP comment.


yea true


I'm not sure such comments are appreciated on HN. All communities and groups in the world have crooks.


I am talking about some of the biggest and famous crooks in India not just any crook.


Which is an irrelevant point and needlessly pedantic in the context of this thread about Gujjus. What I hope is even less appreciated on HN is the pointless "yeah that's true of any community" nonsense the minute anyone says anything with specificity.


Can't say criminals aren't enterprising. At least successful criminals.


There's a much older and a much more substantive article about this as well: https://www.nytimes.com/1999/07/04/magazine/a-patel-motel-ca...


I stayed at a very good Gujju run one in Ukiah last summer, maybe the same family?


This model has led to success for other immigrant groups in other industries.

> Many followed his advice. “They would give each other handshake loans—no collateral, no payment schedule, just pay when you can,” Doshi explains. Once a family purchased a motel, they would live there, and the family members would do all the tasks needed to run it, from cleaning rooms to checking in guests. That helped keep costs down, and profits went toward acquiring new motels. By the 1980s Gujaratis had come to dominate the industry.

The "killer app" here appears to be a lack of resources beyond established relationships. Because of this, whole families were willing to spend their time doing work that most Americans feel is not worth their time.


It's not (just) that most Americans feel these jobs aren't worth their time. There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money for any reason.

There are plenty of American families who have relations who could easily help bootstrap a profitable small business in the way described here. It just doesn't happen that way very often.

Instead the typical means to wealth is inheritance or luck of birth providing access to investment capital (not loans) and business connections. For every WhatsApp there's a dozen or more Microsofts and Facebooks (Gates and Zuckerberg both benefitted from the immense social and financial capital their families could provide).


> There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money

I think the individualist streak in American culture is better shown by people being unwilling to seek help from friends/family. I might call an unwillingness to help others (assuming one can afford to do so) selfishness -- not individualism. But what I have seen in American is, as you said, individualism: People are prideful and want to create wealth without help.

An interesting clarification: People will more readily accept help from strangers -- e.g. a Kickstarter campaign, bank loan, or VC investment doesn't diminish one's pride in the way that the same support from someone's parents might.

There's talk elsewhere in this article's comments here about the "killer feature" that these Indian Americans have. I would argue that the true killer feature is not even access to zero-interest capital. It's a culture that actively fights against pride and individualism.

There are surely tradeoffs, but it's hard to deny the power that can come from children and adults alike all looking to family for help... and seeing that help not as something which diminishes their power but rather as something that bolsters it.


> a Kickstarter campaign, bank loan, or VC investment doesn't diminish one's pride in the way that the same support from someone's parents might.

I don't think it's about pride at all. I think it's about face (something most Americans don't even have a word for, but which is very relevant in this case.)

Americans don't want to give face to anyone, ever. They don't want anyone to have social power over them. When an individual loans you money—or, even worse, gifts you money—you're giving them a ton of face in exchange. Americans find that idea horrifying. It's like signing up for indentured servitude, except—since it's a social rather than legal obligation—you can't even get out of it by declaring bankruptcy! (See: the way "favours" are portrayed in The Godfather movies, for an image of the American mindset on what owing someone a favour / being in someone's debt is like.)

Bank loans and VC investments are better precisely because they're legal rather than social obligations, so you can get out of them (or, say, sell them off to someone else along with the business.) And Kickstarter is better because no single individual is responsible for enough of the loan to actually attain much social-obligatory power over you in exchange. You're maybe beholden to your Kickstarter backers as a class, but you aren't scared to talk to any individual one of them for thought of what they might ask of you.


More to the point, you can never get out of the debt you incur, no matter what you do for the rest of your life. It's not just about the debt one incurs, it's about the one providing the debt and what they expect, lifelong admiration, respect, and deference. I've had insane requests and expectations demanded by family members for really small "gifts" before. Because of that I'd say that the social interest costs are too high for many Americans to be able to accept anything.


> See: the way "favours" are portrayed in The Godfather movies, for an image of the American mindset on what owing someone a favour / being in someone's debt is like.

Maybe not that extreme, but yeah, it's too easy to get guilted into something because you've become socially indebted by something large.

It's not even about being able to get out of it, like you mention afterwards with a legal exchange, it's about the exchange being forced to continue out of a mixture of guilt, politeness, and social pressure in general, simply because you don't want to accidentally kill the personal relationship.


> I think the individualist streak in American culture is better shown by people being unwilling to seek help from friends/family. I might call an unwillingness to help others (assuming one can afford to do so) selfishness -- not individualism.

It's not just practicing individualism, but insisting on it. People don't help others partly because they tell themselves that the person needs to make their own way. It is ultimately a justification for selfishness, but the justification is individualism. And I suspect many people who would otherwise not be too proud to ask for help still won't because they perceive that this is a prominent idea in American culture.

> An interesting clarification: People will more readily accept help from strangers -- e.g. a Kickstarter campaign, bank loan, or VC investment doesn't diminish one's pride in the way that the same support from someone's parents might.

I think that goes back to the same point. Those routes are branded as entrepreneurship, which is like +10 individualism points. If I asked my rich uncle for a loan, he (and many other people) would perceive this as dependency and therefore vaguely shameful. If I took out a bank loan, even though it's technically the same action, those same people would perceive it as an admirable show of entrepreneurial initiative.


While I completely see your point about the negative side of individualism, I think this attitude is also partly based on a very culturally healthy distaste for nepotism.

When you ask your rich uncle for a loan, it's hard for both him and you to really know whether it's being given because he believes in you, or because there is perceived to be an obligation. And where there is an obligation to give loans/favors just based on familial ties, it's a slippery slope to a culture of nepotism and corruption where your name matters more than your skills and accomplishments.

I'm not saying that relatives shouldn't help each other, but perhaps it's not such a bad thing that people seek out other avenues first in non-emergency situations. It's a delicate balance to be sure.


I think it's much deeper than "individualist streak in American culture".

Western Europe in the last 1000 years or so has been a very unusual place... one aspect of which is having nuclear families not extended ones. Because (crudely speaking) the catholic church wished to diminish alternative power structures, such as clans. This led to an unusually open society, which had many benefits... with generally higher levels of trust among strangers.

But it has some costs, too. Like not having tight connections for bootstrapping motels in a foreign land.


Unless you have some references, I'd call this a "nice theory" (to be read with a British accent).

Spontaneously:

* South America appeared to be more catholic than any Western European or US-American place I've visited, but family and extended family are still a big thing.

* Calvinists seem to be much more "open" than catholics to me.

* Damn, I want the secret recipe that lets me set a policy and enforce it in vast areas (at times without any reliable messenger system) and across many generations, even if my successor comes from a different faction within the catholic church.


The fairly solid part here is that the west is different, and my understanding is that the divergence in things like family/clan structures dates to early medieval times, in a zone something like London-to-Milan, core europe. Something changed, long before 1500.

The peripheral was different, e.g. Scotland had strong clans until they got kicked out (to Ulster, and thence Appalachia...). And Spain wasn't even christian at this point in time.

That the church did it is less clear, I agree. There are economic arguments too. I guess I'm persuaded that things like suppressing cousin marriage had something to do with it. I'm certainly not suggesting that there's some essential magic attached to the pope! It was core europe that invented Protestantism too... at the same time as Cortez & co were taking the reconquistia to the Incas, with the pope's blessing but a very different culture.


Extended family may be a thing in Western Europe and derived cultural areas but clans are not. Descent based political groupings are for backwoods peasants at best, not the commanding heights of the polity, unlike every other meta cultural grouping.

The recipe for setting and enforcing a policy over vast areas of time and space is incentive compatibility. It is always in the interest of one powerful political group to make coordinated action against it more difficult. The Catholic Church had a strong incentive to break up extended kin groups and they did. It was possible to get dispensations for royalty and the peasantry mostly did whatever it wanted. Keeping up the same policy for over a thousand years was enough to make Western Europe and especially Northwestern Europe uniquely atomised in human history.

If you want an academic source look below. Frost basically took what blogger hbdchick had been writing about for years, did a review article on it and didn’t cite her. http://hbdchick.wordpress.com/

The Hajnal Line and Gene-Culture Coevolution in Northwest Europe Peter Frost

http://file.scirp.org/pdf/AA_2017082915090955.pdf


He would have tipped his hand as a purveyor of speculative, just-so, white-supremacist garbage, if he'd cited her. Also, there is nothing in that paper to support your claim about the policies of the Catholic Church.


If you’re the Alex who writes Yorkshire Ranter congratulations on an excellent and long maintained blog.

If you want to know more about the policies of the Catholic Church on marriage of relatives the Wikipedia article on cousin marriage is quite good and well referenced if you want to go from there.

https://en.m.wikipedia.org/wiki/Cousin_marriage

On the Church banning marrying relatives

> First and second cousin marriages were then banned at the Council of Agde in AD 506, though dispensations sometimes continued to be granted. By the 11th century, with the adoption of the so-called canon-law method of computing consanguinity, these proscriptions had been extended even to sixth cousins, including by marriage. But due to the many resulting difficulties in reckoning who was related to whom, they were relaxed back to third cousins at the Fourth Lateran Council in AD 1215. Pope Benedict XV reduced this to second cousins in 1917,[22] and finally, the current law was enacted in 1983.

The Church’s justification for banning cousin marriage has no scriptural basis. If St. Augustine's justification for banning relatives from marrying isn’t evidence in favour of what I wrote I don’t know what is.

> Whatever the reasons, written justifications for such bans had been advanced by St. Augustine by the fifth century. "It is very reasonable and just", he wrote, "that one man should not himself sustain many relationships, but that various relationships should be distributed among several, and thus serve to bind together the greatest number in the same social interests".

As to “speculative, just so, white-supremacist” Science is generally built on a base of speculation, which researchers then attempt to disprove. Hypothesis falsification and all that. Just so stories is a common insult thrown against evolutionary psychology researchers but far from universally justified. Given the high degree of fit between the model Snow proposes and the evidence it certainly isn’t justified here.


> Just so stories is a common insult thrown against evolutionary psychology researchers but far from universally justified.

If it's not verifiable even in principle, it's useless from a scientific perspective. And it just happens to be a theory telling white people why they're genetically disposed to morally superiority, which is highly suspicious, coming from a white guy.

> Given the high degree of fit between the model Snow proposes and the evidence it certainly isn’t justified here.

You're not taking the enormous hypothesis space into account. This is not a compelling fit, by any means.


I’m neither a behaviour geneticist nor an evolutionary psychologist, merely an interested amateur so if I can think up ways to test these hypotheses I’m sure actual experts can do better.

We’re learning more and more about the genetic underpinnings of personality traits and getting betterat extracting ancient DNA. It’s also trivial to compute indices of relatedness between two people if you have either a full genotype or just SNPs. If the personality traits associated with WEIRD populations are highly correlated with declines in inbreeding it’s not proof of the hypothesis but it makes it more likely. We don’t have proof outside of Math anyway, Science is about more or less likely.

If you want to learn more about Evolutionary Psychology the Oxford Handbook is excellent and it’s on libgen.io. The introduction is only about 60 pages and addresses the most common and uncommon criticisms ably.

If you think that being unusually individualistic and unfamilistic is morally superior that’s a personal preference you are of course free to indulge.


Dude, I've written papers on population genetics. I know exactly how hard what he's trying to do is. He's full of it.


Thanks for the info. I'm not that Alex.


Check out:

The Origins of Political Order by Francis Fukuyama, which has a pretty long section about how the Catholic Church in medieval Europe worked really hard to break up the power of clans. (It is one reason why they forced priests to become celebate.)

Along the same lines see History of Sacerdotal Celibacy in the Christian Church by Henry Lea.

South America's conversion to Catholicism came long after this period was largely over.

Family & extended family in Western Europe and the US is nothing like it is in some other places in the world. Do you -- and 50 other descendents -- take a plane trip every year to go to your grandfather's grave 1,000 miles away to pray to him on the anniversary of the day he died for good luck? We do that here.


> the secret recipe that lets me set a policy and enforce it in vast area

Prioritize the targeting of clan leaders?


By Calvinists I assume you are referring to Protestants? Or are you actually referring to Calvinistic Protestants? Just curious, outside of Christian circles and history I don't think I have ever seen someone reference Calvinists.


Might be different in the US, in Europe it's not too uncommon to talk about calvinists, particularly in certain countries like the Netherlands it's a well-established term (which is even used there to describe Dutch behavioral culture, because it's deemed to be so fitting), and separate from other forms of protestantism.


Calvinists get plentifully referenced in general circles when you grow up in Geneva ;)


I received a protestant education and as such Calvinism is part of the curriculum.


There are several things wrong with this line of thinking (as others have pointed out), but I'd like to draw attention to a less salient point you made:

> This led to an unusually open society, which had many benefits... with generally higher levels of trust among strangers.

It's interesting that you're portraying the openness of European society in a strongly positive light, given the high levels of abject loneliness prevalent primarily in the west.

Communal living has been a staple for much of human existence, the level of isolation most people in western Europe and North America (and now, much of east Asia) face is a direct result of European "openness" (which spread through east Asia via the British originally, and destabilization + American media later).

The biggest risk to the future of the West is the lack of strong families. That's where India, above all others, shines.


Well this is fun, see other answers.

I agree that the extreme individualist end of the spectrum has downsides, for sure. Suicide rates make horrifying reading. But I think you can argue it's part of what made the west successful -- in HN terms, being forced to learn to deal with strangers, a lot, set you up to scale well.

Isn't the flip side of being on the other end of this scale -- tight happy families, or clans, maybe even castes -- something close to nepotism? Stagnation because once you've employed all your nephews then you can't grow, who would you trust?

Of course there are a million other factors etc too... anyway.


This is true. Since the article talks about Patels. Back in India after holding powerful position in politics, administration etc for long time in Gujarat, Patels are lately agitating violently to be declared "backward caste". So that they can be entitled for more government support in jobs, education etc.


I never connected the decline of extended families to the church, but that sounds fascinating. Any recommended reading?


It's because it's not. Literally all the cultures in which Catholicism thrives are those in which the extended family is paramount. My very large very Catholic very Indian family actively rails against the individualism of secular American culture. As do my Philipino friends who also have very close families. As do my Hispanic family and friends who also have very close families. As do my African friends who also have close extended families.

Literally the biggest group embracing individualism from my perspective are secular white people and mainstream protestants.


I'll stop now, but my church claim was only that the medieval church had a hand in changing the culture, in places which are now mostly protestant or atheist. The places which the post-reformation catholic church has thrived are indeed pretty different.


The dogma of Catholicism did not destroy the clan structure in Europe, though it was certainly used by those who did. It was the humans running the church, who had particular political objectives relevant to the time and place which are not necessarily anything like the political objectives of the people involved with the church these days.

No one here is making the argument that Catholicism cannot exist alongside close extended families, so your objection to the argument that is being made falls completely flat.


I'm struggling to think of a good source right now, sorry. But a link I've posted before looking the other way, at how the other half of the Roman empire turned out: https://www.theamericanconservative.com/articles/cousin-marr... also more recent discussion https://marginalrevolution.com/marginalrevolution/2018/01/ma...


I think of the nuclear family more as an invention of 20th century ad campaigns. It’s a lot harder to sell mom cooking and cleaning products when she has help from an extended family.


Many people thought this, e.g. it was assumed in Victorian England that the past looked a lot like the present of less-developed countries, like Russia.

But it's not true, we have data. The quite readable book on this is Laslett, "The World We Have Lost". https://www.telegraph.co.uk/news/obituaries/1362413/Peter-La...


> Because (crudely speaking) the catholic church wished to diminish alternative power structures, such as clans. This led to an unusually open society, which had many benefits... with generally higher levels of trust among strangers.

Oh please... Indian Catholic families still act in extended structures. I mean, three of my uncles are priests and one is a bishop. We've been Christian for thousands of years. We're still part of an overbearing, very close, very extended Indian family.

The ruining of European culture can be traced solely back to issues in European culture. Let's stop blaming the church for things that Europe brought upon itself.


To be clear, my claim above is that the church, as a centralising power structure in "christaindom" circa 1000AD, played some role in pushing the culture there towards openness, or in making extended families less important.

Claiming that christianity always and everywhere does this would be pretty obviously wrong, and I did not say this. And indeed even within europe today, catholic-ness is anti-correlated with this kind of "openness" -- because the core relevant for this has long since gone protestant or atheist.

I hold this claim weakly. There are other arguments for what happened. But regardless of why, my main point was that Europe (and especially a core area) was an outlier on this universalist/clannish scale. And that both ends have advantages, depending on the situation.


But still this doesn't make sense, as Latin America was converted in the 1500s, well after the 1000 AD change that you claim occurred. Latin America, despite having 500 years for Catholicism to settle in, is still really big into the extended family.

I think a better explanation is the Protestant reformation weakened the idea that any person should subjugate their own personal individual desires for the greater good, with its emphasis on an individual quest for truth, an idea which has now permeated western culture. This makes sense with what I've experienced of non-European Catholicism, which mostly just finds Protestantism bizzare and confusing.


>despite having 500 years for Catholicism to settle in, is still really big into the extended family.

And? The people running the catholic church around 1000 AD were not running the catholic church in Latin America in 1500 AD.


> "We've been Christian for thousands of years."

LOL



> I think the individualist streak in American culture is better shown by people being unwilling to seek help from friends/family.

And our families are, cross-culturally, unusually small. I talk to my parents every few weeks. Not so much my aunts and uncles. I have a few cousins who I see every fifth Christmas or so, and anyone more distant than that may as well be unrelated. This seems to be common within American culture, but it leads to weak social networks - unless you go to the right college and can network there.


I think dispersion plays into this. I could hardly live farther from my aunts/uncles/cousins if I tried (living within this country) and the same could be said for a large number of them. It's a lot harder to stay in touch at a distance. I guess given social media you might say it's easier to stay in touch when close.


Agreed.

Generally my American friends and family never ask for money to fund good ideas. The people asking for money are people who are asking me to throw money at things that won't produce more money(i.e. they don't have a plan for spending it wisely, have shown poor financial judgement in the past, etc).

My friend and his wife just had one of their cars stop working and they both need cars to make money. They are in debt and need to work. There's no way my friend will ask, but I will probably find a way to help them. My niece has no problem hitting up my parents for money for her latest crazy investment scheme after demonstrating several poor choices and a lack of business and financial judgement.


> There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money for any reason.

I agree with the individualist streak, but the second part is pretty much untrue of anyone I've met in the upper plain states. Helping to bootstrap you friends and family is part of the culture.


> There's talk elsewhere in this article's comments here about the "killer feature" that these Indian Americans have. I would argue that the true killer feature is not even access to zero-interest capital. It's a culture that actively fights against pride and individualism.

I think the true killer app is family cooperation as a unit in conjunction with a deep network of relatives. My father built his business with the help of his parents, his aunt, and two other cousins who lent him money. Without their help, he couldn't have built the business as fast and as big as he did. His brother also worked for him a bit as well as some of the cousins when he was building his first shop. My mother helped him and once she had me and my brother stayed at home and took care fo the home front even though she had a masters degree. And it appears his generation along with my mothers was the last hurrah of big family ties and help as everyone in my generation up and left. I have no cousins, uncles or aunts who are close. They all did their own thing, went to school and moved away. I see them from time to time, maybe once or twice a year and that's it. Hell, even my mother has all sorts of stories about how here massive Irish family (grandma was one of 12 kids) pulled together to help each other with everything.

Contrast that with my Guyanese friend who has a seemingly never ending supply of helpful family members all in the same neighborhood. His father built himself a small real estate empire of about a dozen rental properties and most of his generation are college educated. His father started out doing handyman and light construction work with his brothers. They all chipped in and worked. Some even had a day job and came to the properties at night to work on them. One by one they fixed and flipped homes using money and labor they pooled together. Then they started buying, fixing and renting. They acted as a small family army, cooperatively building each others future.

The American family has been here long enough to thin and die whereas these foreign families are still "fresh" to America and working hard to make a good life. But they too will one day suffer the same fate. Subsequent generations won't have to work as hard as they are already comfortable. Little by little they will spread out, move away, and their once mighty army is no more. From my perspective as a true 3rd gen American (all G-Grandparents came from Europe around the same time) is that by the third generation, there are no more cultural roots. And family is culture so family dissolves as well. My mother and father were the last to really care and my father was very meh about his Polish heritage. My mother was adamant, keeping traditions alive for as long as possible but the local family thinned out as the rest moved away. She is probably the last to really care about family and cultural roots which bound the early immigrants, and their children.


There are good reasons that many people avoid lending money to (or even doing business with) close friends and relatives. If the venture doesn't succeed, and the friend is unable to repay the loan, it can create animosity and bitterness that wreck the relationship. Even if things go well, it can create an uncomfortable power dynamic that makes the relationship less pleasant and friendly.


I grew up in a community that was just coming out of this phase (the combined Israeli and Persian Jewish communities of LA). I think you're interpreting "relations" in a way too close to the "relatives" of the (relatively atomized) White American society.

Informal immigrant aid networks are generally wider than "close friends and relatives" - they extend to distant cousins and friends-of-friends. For example, in this article the relevant quote is “If you are a Patel, lease a hotel” - Patels being a relatively broad caste, and a surname representing about 10% of all Indian-Americans, not a "family" in the American sense.

For a concrete example of how this works in the Middle Eastern Jewish community, and historically in the Ashkenazi immigrant Jewish community:

Instead of "hey uncle, I hear you have $50K lying around, could you loan me some?" it's "hello second cousin once removed, my uncle got me in touch with you - I hear you've got $50K lying around?" You're generally a step or two removed from the direct source of money. The act of the intermediary is a one-time intervention and said interaction is usually closed out with a direct thanks or a gift or both, rather than being an ongoing professional relationship. If the venture doesn't succeed you'll have an awkward relationship with the two-hops-removed acquaintance, and the one-hop-removed intermediary will know about it and be less likely to recommend you to others for credit, but real social consequences that extend to direct friends and relatives are reserved for those who are considered to have acted maliciously or irresponsibly (e.g. if it's clear you've blown the money on hookers and blackjack, you and possibly your children will be ostracized).

Search for "credit" in this article on immigrant enclaves for some examples of communities with these kinds of social structures: https://pdfs.semanticscholar.org/433f/567bd158d95f0c2611489d... (This also mentions different informal lending structures than the ones that I'm familiar with personally - instances in Korean and Latino communities of "lending circles" i.e. collective lending among peers, rather than from individual community eminences.)


I also think a middle-class family is in the "sweet spot" where they have a lot to lose from offering a loan as opposed to either not having a lot to lose in the first place or being so well-off that they can easily just write off a bad investment.


I think both of your are correct, but to add another problem, its that there is sort of the understanding that a family member isn't going to try and get your house/car/whatever taken away to pay off the debt. So, family loans are often viewed more as gifts. I'm not going to give a family member 1/2 my life savings as a gift until it becomes an inheritance, unless I really believe in the business and am getting some kind of equity stake/collateral in return i'm not going to be making a "loan".

Plus, its one thing to "invest" in someone buying an asset, like a house/motel/gas station/CNC mill/whatever, vs loaning someone money to start a graphics art business where the money is going to basically pay "salary" and once its spent there isn't anything left to sell when the business fails.

Although, the one common thing I've seen a couple times, is an uncle/whatever paying for a college or a trade (like nursing) school under the "teach a man to fish" theory.


To some (admittedly fuzzy) degree what you describe is a symptom of what I describe, not a causal reason for the taboo or individualistic tendency to exist.


Jeff Bezos also got a loan from his parents. Having parents with disposable capital in the >$50k range is definitely not something the majority of American families can provide.

https://medium.com/@timconneally/companies-started-by-loans-...


Most families don’t have $50k to invest in their kids’ business, but there are at least 10 million such families for each Gates/Zuckerberg/Bezos etc.


To be fair, with Jeff Bezos and his parents it wasn't a loan but purchased equity that is now worth billions.


"When he was 17, Musk left college and moved to his mother’s home country, Canada, later obtaining passports for his mother, brother and sister to join him there. His father did not wish him well, Musk recalls. “He said rather contentiously that I’d be back in three months, that I’m never going to make it, that I’m never going to make anything of myself. He called me an idiot all the time. That’s the tip of the iceberg, by the way.”

After Musk became successful, his father even took credit for helping him – to such a degree that it’s listed as fact in Elon’s Wikipedia entry. “One thing he claims is he gave us a whole bunch of money to start, my brother and I, to start up our first company [Zip2, which provided online city guides to newspapers]. This is not true,” Musk says. “He was irrelevant. He paid nothing for college. My brother and I paid for college through scholarships, loans and working two jobs simultaneously. The funding we raised for our first company came from a small group of random angel investors in Silicon Valley.”"

https://www.rollingstone.com/culture/culture-features/elon-m...


If I ever loaned my family money, I'd make them sign a secured, transferable note and then sell it off as quickly as possible.

I'd rather extend a monetary gift without any expectation of repayment.

Any money-related issue is bound to sour relations with your family sooner or later. Business partners that fall out can go their separate ways, but when your sister-in-law cheats her siblings out of their shares of the estate--because she opened the account for her Mom, and it was a joint account, just in case something happened to her--that brews some resentment.

Loans make you involved in the borrower's business, and when things so bad, you need to be able to exercise all your options. Your lazy brother-in-law probably isn't going to prioritize making the loan payment to you over buying a new snowblower, or whatever other toy. Your sleazy brother-in-law might just default, claim your loan was actually a gift, and all but dare you to sue him. So it isn't just that there is a taboo against lending, but there is an insufficiently strong tradition of honoring personal commitments and sacrificing of one's self for the sake of the family.


The way to make loans to family and friends is straightforward. Make a small loan. If they pay it back, then loan larger amounts.

If they don't pay it back, you have the perfect excuse to never loan them any more.


a very strong taboo against lending friends or family members money for any reason.

This is true. I think we got it from the British.

Hamlet: Act 1, scene 3:

"Neither a borrower nor a lender be,

For loan oft loses both itself and friend,

And borrowing dulls the edge of husbandry"


> Instead the typical means to wealth is inheritance or luck of birth providing access to investment capital

The typical means to wealth is spending below one's means and investing the rest.

https://www.nytimes.com/2018/09/01/style/fire-financial-inde...

And there's the book "The Millionaire Next Door" which shows that 85% of American millionaires are self-made, usually through spending below one's means and investing the rest.


Are those actual early millionaires or just retirees with retirement savings?


Early millionaires. The article makes it pretty clear.


No, I mean the data on 85% of millioniares. It probably captures mostly retirees.

As for the article, the people in it seem to need to continue living a frugal lifestyle after early retirement, so they aren't exactly wealthy. Financially independent, yes, but not wealthy.


The article is about retiring at 30 as a millionaire, and yes that requires living a frugal lifestyle. But if you're willing to work longer, far less frugality is needed.

The book is pretty cheap (!) and well worth a read if you're interested it becoming financially independent. There are lots of financial advice books, this is one of the better ones, and the advice is straightforward. It doesn't involve learning option trading or real estate hacks.


I don't really think one paragraph follows from the other. You say Americans are uniquely unwilling to pool their financial resources to family members, then cite examples of that happening.


No, I say they're unwilling to in the way described, and cite examples of how specifically it usually works.


> taboo against lending friends or family members money for any reason.

It's less taboo than years of hearing stories of ended family relationships where money was loaned and then abused, mishandled, wasted, etc without any intention of paying it back. I've heard these types of stories my entire life.


Yeah, money is the number one reason marriages break up, and I have seen the same happen to siblings.


> There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money

For friends and extended family, I agree. However, most people I know have borrowed from their parents for things like their first car or the downpayment on their first house if they need to. Is that not normal?


In including "circumstances of birth," the parent is implicitly making a division between friends/near family and immediate blood family. Americans usually are willing to help out their direct descendants, often willing to help out their parents and grandparents, and rarely if ever willing to loan money to a nephew or college buddy (more than $50). The reasoning behind this is that business relationships can become incredibly sour, and "never seeing them again" is a pressure release that exists among strangers in New York but not among close family or best friends.


>It's not (just) that most Americans feel these jobs aren't worth their time. There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money for any reason.

Interesting. Never heard of this before. Why do you think it is so (the taboo)? (I read some replies to your comment below, just want to see if you think something different).


Americans want less risk, and fiscal policy drives consolidation.

Hotels aren’t a Business that requires immigrant labor because it’s undesirable —- it’s a business that needs capital and SMB are starved of capital.

Many Americans come from a cultural background where there is shame involved in talking about money and doing business with family, and prefer dealing with institutions.


> There are plenty of American families who have relations who could easily help bootstrap a profitable small business in the way described here

The problem is a lot of those business aren’t vetted. How do you know if anyone’s going to eat at Uncle Ned’s crab shack?

These motels are more like new franchises than a startup. They’ve already been partly de-risked.


I would have put it more at not about lending them money but the strong desire to strike out on their own. plus throw in sibling rivalry where culture tends to put self first and family second. there are communities within the US which still lean family first but they are not common in the cities


Another important difference is the free-labor-from-your-kids benefit. From what it appears, Indian families are more cohesive and their kids are less rebellious (at least 1st generation). I'm aware there are also American children who work in their parents small businesses, but I think they are more likely to demand compensation.


I believe Gates started Microsoft with a $5000 loan from his parents. Not that "immense".


Gates did not start Microsoft with a loan from his parents, it was entirely bootstrapped financially.

Paul Allen and Gates had saved up a small amount of money from contract work. Together they provided all of Microsoft's seed capital. They had customers for Microsoft essentially from the start of the business (MITS being the first), making it profitable nearly from day one.


Which completely bypasses the point that their parents had to be wealthy enough to provide for his education at a school that had computing labs at a time that they were very rare. Bill Gates and Paul Allen certainly had to work their tails off, but negating that having a wealthy parent puts you in a far higher likelihood to be successful is just silly. The average child of poor parents is not likely to have the same opportunity as those of a child of wealthy parents. It's exactly what perpetuates the cycle of wealth.


Lots of people started microcomputer companies at about the same time as Gates. Evidently, not attending Lakeside was not a barrier.

Gary Kildall wrote CP/M in 1974, a year before Gates formed Microsoft.



I.e. the price of a modest new car. Hardly "immense".


My parents bought a car for me to drive back when I was a teen. It cost $900, not $25,000.


The average price of a new car in 1975 was $4,960.

http://www.autonews.com/article/19960626/ANA/606260830/1975-...


I wrote "new" car.


What valuation do you give his mother's influence over the board at IBM?


It's unknowable. But keep in mind that Microsoft was already established and very successful at the time, and Gates was a very astute and aggressive businessman. IBM went to Digital Research first, and Gary Kildall suggested they check with Microsoft. Microsoft was the biggest player in microcomputer software at the time. Why wouldn't they check?

And how much credence would IBM give a mom (who had little knowledge of computers and software) who suggested checking out her son?

Lastly, the accounts of her advising IBM to use her son's company are not verifiable.

IBM went to Gary Kildall first.


> The "killer app" here appears to be a lack of resources beyond established relationships. Because of this, whole families were willing to spend their time doing work that most Americans feel is not worth their time.

I really dislike this argument. It makes middle-class Americans sound like a bunch of ungrateful churls, because they think that <some job> is beneath them (at the price the employer is willing to pay, but that part is always left unsaid).

I don't call my landlord an ungrateful churl, because he thinks that my <sub-market-price-offer> for his apartment is beneath him. Yet, this is a consistent argument whenever an employer-employee relationship comes up. No shit, I don't want to pick strawberries for $5/hour, when my rent is $2250/month. That's not because manual labour is beneath me.

The thing is - at a low enough price point, no work is worth anyone's time.

Those family members were probably working for below minimum wage. Surprise - their business was successful, compared to one where you have to hire employees, and pay them a minimum/living wage, and have an inflexible schedule of interest payments to whomever fronted the money for you to start the business, etc, etc.

It's not culture. It's economics.


> at the price the employer is willing to pay, but that part is always left unsaid

The price the employer can offer is denominated in a currency you cannot use. For the family member, it's more like receiving massive equity stake with little to no salary.

A friend of mine had his great uncle come to America penniless in the '80s. They own apartment buildings in Queens now.

That's because a 12-year-old kid is going to come home, finish homework, and then man the store for three hours, taking over from his older sister. Daycare is free because the 15-year-old will manage the 12-year-old and the 12-year-old will manage the 6-year-old when the teenager is out. It's a tough life, and I don't wish it upon my kids but that shit went straight to equity. Those kids are now well off middle aged people, and when their parents (the original immigrants) pass, the grandkids will be fabulously wealthy.


>> I don't want to pick strawberries for $5/hour, when my rent is $2250/month. That's not because manual labour is beneath me.

It is about economics and expectations. No, it is because a $1000 apartment is apparently beneath you. It is the same reason there is a "shortage" in technology yet thousands of Indians applying for those jobs -- because most American students dont want to live in outer San Jose, San Martin, or Rucker and commute for 4hrs or live in nasty apartments. Most Americans also dont want to be tied on Production Support getting calls all night for crap wages.

And frankly, I dont blame you. I'm a computer science grad in the US. The bay area wages, even while inflated, are not living wages for families, certainly nothing given my excellent education...and alternatives. I'm in management. I work half the hours, and earn a good pay.


> It is about economics and expectations. No, it is because a $1000 apartment is apparently beneath you.

And yet, letting my apartment out for $1000 is apparently beneath my landlord (Look at how entitled he is, to be asking $2250! It's almost like that's the price the market is willing to bear!)

Yet, we only use this sort of judgmental language to express outrage at employees, unwilling to work at a price below what the market is willing to bear.


>> unwilling to work at a price below what the market is willing to bear.

You realize I'm agreeing with you right? You are looking at the Palo Alto market, or San Jose market. But an immigrant might be willing to live in inner Oakland or a place where the market IS willing to give you a home for $1000 a month it is just not what you come to expect as an American.

I'm Indian American. My father was willing to live in a roach infested inner city apartment and thus we managed to pay $400 rent. I grew up in the US and got a top-3 school CS degree. I'm unwilling to live like my father. Hence I dont compete with H1s on the "jobs going unfilled" because they dont meet my expectations. Luckily I (and probably you) have options. My father didnt. We're lucky and we can be picky with where we live.

And for the record, the market will absolutely give you a sub $1000 apartment if you commute far out enough and live in disgusting conditions. You and I are unwilling to do so. Others will.


The specific term for what you're talking about is arbitrage. You're making a high wage in the city, but choosing to live in a lower cost of living area and keeping the difference. As someone who commuted hours each way for years, this absolutely works and you don't even need to be a specific ethnicity. I've worked my way up from crappy jobs cleaning up sewer damage, to a call center, then an IT dept, and now into IT management. This is possible for anyone willing to put more work than average, and who is ready when opportunity/luck/karma comes knocking at your door.


Nevermind that scheduling family members to work can be much easier than a worker you hire, which lets a small business run with fewer employees working more valuable hours.


Really? The killer app here seems to be access to capital on amazing terms.

> They would give each other handshake loans—no collateral, no payment schedule, just pay when you can


They don't say how big is the loan, nor how many were needed to buy the hotel. They might have had to shake hands with everyone in their family.

Some Asian immigrant families form a "lending circle" where they choose a member to go 1st, and everyone gives their extra money to that person, and they buy a hotel/restaurant/etc. The circle chooses a 2nd, and everyone gives them spare money - it's a lot faster this time, with the one hotel/restaurant/etc owner paying in a relatively large amount. This goes around until everyone in the group (maybe 12-20 people) has a hotel/restaurant/etc.


Worked in restaurant industry. Latino workers had a pool of money that the all put into and if I remember correctly they rotated who the paid it out to for big purchases like this. I think they mainly used it for like cars and homes.


I had an ex-girlfriend whose family did this. I had no idea it was a cultural thing (she was from Mexico). I just just thought it was specific to her family. If I remember correctly though, it caused a far amount of problems because people would often stop paying after their turn.


Yeah I can imagine. Really has to be close nit so you can put social pressures.


These are called https://en.wikipedia.org/wiki/Chit_fund. Pretty common in countries where access to the formal banking sector, especially for women who are home-makers, is complicated.


Awesome didn't know what the formal name was.


Excellent observation! This is the basis of "chit funds" (https://en.wikipedia.org/wiki/Chit_fund), an alternate form of circular financing in India. Similar schemes also apparently exist in countries like S Korea per my Korean neighbor. But in the motel instances outlined here, anecdotally, lending circles are not used. It's typically a small group of family members or very close friends with a pool of money to "lend".


Also access to cheap/free labor, also perhaps underaged labor?


Yes, having family members work for you for free is legal.

My accountant once encouraged me to try to get my family members involved in a business I ran just for that reason.


I think the question of age comes into play though.


Possibly. But there are an awful lot of very young family members working on commercial farms.

That’s why rural states give drivers licenses to kids as young as 14 — so they can drive a tractor between fields.


8yo me would have been intrigued by this possibility. (This was on a farm.) As an adult, it seems that anything kids might do around the house, they might do in a family-owned motel. If there are laws against that they are bad laws and also inconsistently enforced.


There's a family business exception.


Underaged labor is legal in the USA as long as they are employed by their parents and the work isn't in manufacturing, mining or occupations declared hazardous.

https://www.dol.gov/whd/regs/compliance/childlabor101.pdf


You could make the argument that startup founders who aren't taking a salary from their early stage startup are also performing "free, illegally so" labor.


I think in that case, you can't work for yourself illegally.


If the startup is incorporated, then you're working for the corporation, not for "yourself."


The original blockchain:

https://en.wikipedia.org/wiki/Hawala

Very difficult to trace and crack by authorities.


There's an interesting ancient pattern of small minority groups dominating certain businesses, often ones which need trust -- here "handshake loans", but traditionally also simply payment for goods shipped long-distances.

e.g. The Greek trader in one little Egyptian town could be more confident in dealing with another Greek trader somewhere in Italy, a week's sail away, because while he might be tempted to run off with the money, word would get around, and soon no other Greek would trust the guy, nobody would marry his sons... he'd be ruined by expulsion from his community. This mechanism didn't work for people from the majority community, because they weren't so specialised, could do other business, could find another priest... Thus the Greeks could ship things cheaper, and won the business.

The Patels, and related Gujarati groups, have been in this kind of trust-heavy long-distance trade for centuries. They spread all over East Africa in the 19th C, and did very well.


It's sort of common knowledge in India that Gujaratis, Sindhis, Punjabis and Malayalis (Keralites) are generally pretty enterprising and are often businessmen, both within India and abroad. There can be other such Indian communities too, of course. These are just the ones I have heard of (from childhood) as tending to be more so.

For example, the Patels in the US are the topic of this thread; then there are lots of Punjabis (which includes Sikhs) in Canada; Sindhis, I've heard, are many in Hong Kong; and many Keralites in the Gulf. Again, I don't mean to rule out other places where these or other Indians could have gone, these are just the ones I am more familiar with, and may have relatively high concentrations. Be interesting to know if there are other places where particular groups have gone and done well.

Of course, lots of Indians went to Fiji and Malaysia too, I've read, although those may have mostly gone as plantation labor initially (and some to Trinidad and Tobago, Guyana, etc.), during British colonial times. Don't know how those are doing now.

On a side note, when I visited Kuala Lumpur once, I tried out some Malaysian (South) Indian food; it was both similar and in some ways different to South Indian food in India. I guess it is both because they use some different local Malaysian ingredients, and because of the long time of separation from India must have made their cuisine evolved to be somewhat different. It was interesting stuff, though.


Yes indeed, they specialise within India too. And surely some of the same network benefits may apply there too. Surely Parsi entrepreneurs (a century ago) got better loans... backed in part by the fear of angering a close community?

It's also my hazy impression that the plantation-labor Indian groups haven't done nearly as well on the whole.

Another example is the surprisingly high proportion of overseas Chinese who are from Fujian.


>Surely Parsi entrepreneurs (a century ago) got better loans... backed in part by the fear of angering a close community?

Could be. I do know that Parsis are said to take care of the elderly and poor of their community. They have retirement homes and do charity for them, etc. They are generally philantropic too, like some others. Good of them.


I recently learned about oulipo (https://en.wikipedia.org/wiki/Oulipo) who create works with constraints (sometimes severe) and the results are quite amazing. Lack of resources can be sometimes a blessing in disguise whether it is literature or hard business.

I wonder why Americans don't do this (maybe they do, I don't know) - why borrow from banks (or VCs etc) with strict strings attached, instead of supporting one another based on trust? Obviously this won't work for millions of dollars, but this should work for 5/6 figure loans?


There has been a long term decline of community banks, which might be the more American equivalent of this kind of lending.

https://www.stlouisfed.org/Publications/Central-Banker/Fall-...

The Small Business Administration also helps with loan guarantees. So the support is sort of there, but takes a different form, and maybe one could say the impersonal nature of it is both a strength and a weakness in comparison. Numbers of small businesses and their starts have been in decline too. I suspect this has to do with the difficulty of more and more Americans in attaining any savings from their wages (let alone enough to set aside to help capitalize a small business).


I suspect this has to do with the difficulty of more and more Americans in attaining any savings from their wages

All the more important to support one another. Although, if everyone in a person's trust circle is more or less in the same boat, then tough luck :(

With no meaningful support from gov/banks etc, people banding together to help each other might be an alternative. Some non profits are working in this space too. After Sandy, some orgs in NY were giving interest free loans to small biz people who lost their trucks etc.


Americans are forced by law and convention into living a very specific kind of life. Lots of things they do and "own" require substantial investment of money and time. A regular (not minimum) wage is calibrated to just barely take care of all that, and modern marketing specializes in "educating" our tastes so that we can really tell the difference between e.g. $18k and $28k automobiles, to keep us on that treadmill even when we have plenty.

Although on average they are poorer, residents of India have a great deal more freedom with respect to the costs of everyday life. No matter how basic their housing, transport, clothing, food, education, safety, etc. may be, they can always trade down if their situation or preference changes. Many lives lived happily in India would be largely illegal in USA.


I think it's counter-intuitive but in a high trust society you don't have a need to build these networks. In a low-trust society (like India) you have to build trust networks. These trust networks are _much_ tighter, though, than the usual interactions in a high-trust environment out of necessity in participating in a low-trust environment.

When you take these trust networks over to a high-trust society, they just act as additional leverage in your life.

I know Indian guys who lent each other large five figure sums to help business deals go along and, the most surprising to me, had one take on a mortgage for another in Menlo Park! (The family it was for was a dual income software engineer family, just missing a credit history and starting capital).


based on trust?

Because there is a general lack of trust of people outside one's immediate family and a (usually very) small circle of friends.


Family members are pretty much exempt from labor laws. Hence the cost structure can be a lot lower by using family labor.


> The "killer app" here appears to be a lack of resources beyond established relationships. Because of this, whole families were willing to spend their time doing work that most Americans feel is not worth their time.

Most restaurants in Europe are run by immigrant families, they couldn't turn a profit otherwise.


Could this apply, or have applied, to farms? I bet that would have a lot of interesting social effects.


In my area it already does. My Indian colleagues informed me that grocery stores that cater to their culture typically have exclusive agreements with local Indian farmers, which results in significantly reduced prices. I thought that was wonderful--I'm a fan of frugality. I'm curious if this is common in the US in other immigrant communities.


My dad's friend is an Indian farmer in Valdosta, GA. He has 10k acres of land, has his own private plane and flies Indian groceries to Houston once a week.

He immigrated to the US back in the 60's. I had a chance to meet him and he had an extraordinary character. He had no formalities and greeted us at his farm house without a shirt on. He was old but fit and you can tell what he has gone through in his life to make a living.

He spoke fluent spanish and everyone loved him in Valdosta. We spent 3 days there and went to restaurants in the evening. Everyone greeted him as if he was some kind of a hero in the town. It was really an amazing experience to have met him and his family - just shows how immigrants assimilate in the most remote places in the US, especially in a hostile place such as south Georgia in the 60's.

Edit: This story is from 2002.


Wow, cool story. I wonder under what visa or work permit scheme he went there. I had two uncles and an aunt who went to the US and stayed there, but they all went via the traditional grad student then H1-B then green card then citizen route, and were all white collar workers (an engineer turned entrepreneur and two academics), not farmers. Didn't know there were schemes for farmers and such, then or now, for the US, although I think there might be for Canada.


At least in the late 70's - early 80's, if you could find an employer to "sponsor" you (basically agree to give you a job for a certain amount of time), then you could immigrate with a green card immediately. There was no specific "scheme" for particular occupations: many of the people who did this were low-wage workers doing housekeeping, janitorial work, construction, etc.

I'd assume something similar was already in place during the 60's.


Interesting, thanks.


>then H1-B

Sorry, that should be H-1B.

https://en.wikipedia.org/wiki/H-1B_visa


> I'm curious if this is common in the US in other immigrant communities.

Yes absolutely. As an Indian American, I'm familiar with the Indian grocery store model. However, I grew up in a majority vietnamese area of Southern California, and most of my friends growing up were vietnamese. They had a few interesting hustles going on:

1. A few families were involved in growing produce in their backyards, and grocery stores would source these fruits. Many of the fruits (certainly not all) popular in Vietnam would grow in the heat of SoCal, but they were not farmed commercially.

2. My mom's friend told her that many vietnamese restaurants sourced their egg rolls from various aunties scattered around the community. The egg roll they made was very standardized, and they would sell many trays a day to the restaurants for cents on the dollar.


Assuming these fruits were not native to SoCal, how did they get the plants/seedlings there? Under the table? I think it would be very difficult to bring Vietnamese flora into the USA through legitimate channels.


The fruit I was talking about is dragon fruit: https://en.wikipedia.org/wiki/Pitaya

Which, while popular and does incredibly well in Asia, is also apparently native to the Americas up to Mexico, so it wouldn't be a far leap to grow it in SoCal

But I mean, as someone whose family is from Asia, it is not particularly difficult to sneak things in to the United States.


No. Hotels work because they require capital and low overhead — they also have a limited scope of competition. farming is a business in the middle of a consolidation wave. Small farmers are being starved out and losing access to capital as small banks go away.

I don’t thing that the gujarati model works for fringe agriculture. The big players in the agriculture business are global now, and a farmer in Ohio or New York will have a hard time making money, as the big companies just need to outbid you for one harvest season, and make up the difference with their weekly harvests in California, Chile, etc.

There are players (people serving Chinese restaurants and the Amish) doing well, but those markets are limited.


The model doesn't work in commodity ag, but no model really works for that in the long term. It always takes more capital. Farms have been failing (or "consolidating", if you prefer) for 150 years. The bogeyman didn't shutter those banks. The nonviability of buying a bigger combine and renting more land every couple of years shuttered those banks. Such a bank could have stayed open if at least once every few years its county was the only one in the Great Plains to get rain. That would have been a lucky bank...

I'm not sure what will disrupt commodity ag, but it sucks, and the sooner it transforms into something else the better. The most successful farmers I know now are raising goats for halal butchers. I'm going to start crossing my cattle with "wagyu" bulls. Don't sell commodities.


Could you elaborate on your question? I don’t understand what you are asking.


>> Once a family purchased a motel, they would live there, and the family members would do all the tasks needed to run it, from cleaning rooms to checking in guests. That helped keep costs down, and profits went toward acquiring new motels.

It is the exact same with convenience stores. Work 12-14 hour days. Only have other family members work there.


If you are interested in these kinds of stories, check out the documentary http://www.thesearchforgeneraltso.com/

Aside from being specifically about searching for the origin of the general tso recipe, it talks about how chinese immigrants came to own so many chinese restaurants across the country.


Just recommended this film today to someone! Definitely worth checking out, even outside your interest of what General Tso actually is.


I find this interesting, because my family used to take road trips all the time (annually in the '90s, less often since then), and we mostly stayed in motels that were part of national chains like Hampton Inn, La Quinta, Holiday Inn Express, Fairfield by Marriott, Best Western, etc., and I honestly don't recall the staff being Indian (since we mostly travelled through the Southeast, most of the employees we interacted with were black). I guess the owners could have been, but that would mean they're hiring people outside of family.

I'm wondering if this article applies to just independent motels or if it also includes franchises of the national chains (at least, I assume the national chains use a franchise model). I'd be honestly surprised if independent motels were a full half of the number of motels in the US, since the chains are everywhere.


90s is far to early. The anti-asian immigration laws were repealed only in 1965 [1] only to benefit Poles and Italians but then also ended up benefiting Indians and Chinese. Many of them came to USA during that time and toiled mostly in menial jobs. It was only around late 80s that they had gathered enough influence to buy motels and such and this motel takeover was much more visible during early 2001s. In the Obama era recession the property prices dropped further and many Indians purchased even more motels.

Also the Patel community is not really into high end motels like Hampton Inn. They are into Motel 6, Super 8, Choice Hotels, etc.

[1]


My 100% of the staff is non-Indian. In fact, most of the franchise owner's staff is non-Indian.

Small, economy brands & independent motels can't afford to hire full-time employees or outside help. Also, most of the money you can make is by not hiring outside help.


It's common enough that urban dictionary has a definition for Potel (patel + m/hotel)


On the same note, I recently watched this video covering how Cambodian immigrants ended up running so many donuts shops, especially here in SoCal: https://www.youtube.com/watch?v=LQLtRRe5EBc


And Tippi Hedren bringing Vietnamese refugees into the nail salon business. 51% of nail technicians in the United States and 80% in California are of Vietnamese descent.

https://www.bbc.com/news/magazine-32544343


I became aware of the Gujarati hospitality empire some decades ago, when my work involved community organizing in the rural US. I was finding that just about all the old motels on state highways were run by Gujaratis. And when I'd become a regular, some would share about their experience. And would invite my friends and me for dinner, which was heaven. Especially given that the alternatives were typically burgers, steaks or fried chicken.


This book provides the investment philosophy behind the Patel success and how it can apply in other realms.

The Dhandho Investor: The Low-Risk Value Method to High Returns by Mohnish Pabrai

The author is an investment manager with a focused value strategy.


+1 Dhandho Investor describes this same story and the philosophy / technique to replicate this approach in your own life

https://www.amazon.com/Dhandho-Investor-Low-Risk-Method-Retu...


I look forward to the next National Geographic article in this series where they document in detail how American Jews came to run a substantial proportion of U.S. media!

edit: I need to put this more judiciously :) run => exercise control over


I am from gujarat, do not own any motel. In my experience I can definitely believe this to be true. Personally know so many people heho owns motels. I am shocked about the 50% though!


No one who travels and stays in small-to-medium-sized hotels is shocked by this. I have a complaint, however. We have so many Indian-Americans distributed all over the nation, and it is still fairly difficult to find good Indian food outside big cities.


I've wondered about this, but what I've heard is that few Indian families eat out very often.


Indian food is labor intensive and uses expensive ingredients. Restaurants are also low margin businesses that don't scale well and are super risky, not something I'd advise someone to do unless they have a passion for it and ability to fail and carry on with life.

I have not been to a single Indian restaurant that can compare to a home cooked Gujarati meal, especially made by someone who grew up there.


I'd be thrilled if there were some restaurants that passed a much lower bar than that. I don't agree about expensive ingredients. Lots of restaurants (not all!) have figured out how to serve non-spoiled vegetables. When I lived in Singapore I lived near (and patronized regularly) a bunch of Indian restaurants that did that without refrigeration (at 1° N latitude).

The labor costs are an issue. I cooked a curry with garden vegetables and Gulf shrimp over the weekend, and it took over an hour (perhaps it would have been unpalatable to a real Indian person, but three hillbillies from the Ozarks liked it just fine). However, it's possible to purchase e.g. frozen okra that's already sorted and chopped.

But yeah restaurants are difficult. Way too much competition in that space unless you really like running a restaurant. Chinese-Americans seem to have had some success, however.


For home cooking, pressure cooking makes Indian meals much easier. In a restaurant you'd presumably make big batches


Pressure cookers make lots of stuff easier! They don't chop up vegetables though...


> Indian food is labor intensive and uses expensive ingredients

Labor intensive yes, but expensive ingredients? Maybe saffron, but it's used very sparingly in only a few dishes, and a little goes a long way.


Generally, vegetables are more expensive than grains and more perishable.


By mass, Indian food is mostly grains and pulses (Rice, wheat, and split peas).


You should try Rajdhani in Artesia, CA if you get a chance. But that's the only one I have found.


Or Shahnawaz, not too far away.


For the time I spent in India, most of them eat their meals at street stalls throughout the day. Those that do have home cooked meals, often have housemaids that do all of that super labor intensive cooking. Even the relatively poor, have even poorer people working below them at home!


Good Indian food doesn't exist in the US.

Take a trip to BC, or the UK, and you'll see what I mean.


This is incredibly diminutive of Indian cuisine in America.

The Bay Area itself has Zareen's (Michelin guide) and Rasa (Michelin star).

Yes, the UK has much more phenomenal Indian food, but to say the US has none is wrong.


I'm sorry Michelin star means squat for Indian food. I have tried both and they are pretty crappy.


Ah yes, Indian cuisine like "Bombay Sliders."


Dude I've lived in Singapore. You don't have to tell me about food.


Hopefully you made it to Penang then.


While I am in agreement that BC has plenty of authentic south asian cuisine, Seattle is not so terrible.

Food recommendation: Gulberg Restaurant, 5943 Fraser St, Vancouver, BC V5W 2Z6

Authentic Lahori food.

The cuisine is way older than the 1947 partition...


"...not so terrible" isn't a ringing endorsement.


What is good in Seattle?


Everything good is actually within a 5-7km radius of Microsoft HQ in Redmond, on the east side. There's a really good chaat place. And a grocery store where the clientele are 99% Indian, a half block from the chaat place.

https://www.google.com/maps/place/Chaat+House/@47.6326521,-1...

If you are far south of downtown in the Renton/Kent area, this Pakistani kebab place is great:

https://www.google.com/search?client=ubuntu&channel=fs&q=maz...


Mayuri (the grocery store) does have a great selection of staples items.

In that same parking lot is Teapot Vegetarian House (not Indian) and Malay Satay Hut (though the quality was lacking last time we went).


Naan and Curry has the best non-vegetarian South-Asian food in the Seattle area. It has branches in Renton and Issaquah. I have personally found it much better than Maza grill, mentioned in the other comment.


I’ve eaten there in the Bay Area and am inclined to agree with you.


I think its more than 50%.

My new owner origination had about 16 owners/managers. 8 owners were Indian/Gujarati, 1 owner was from Pakistan, 1 white owner and rest were managers.

I went to my first franchise conference and almost 70+% of the US owners were Indian/Gujarati.

I got 2 greeting cards from the franchise in 1 year. 1 was for Diwali/Gujarati New year and 1 in December for the new year.


https://en.wikipedia.org/wiki/Lakireddy_Bali_Reddy exploited the Indian caste system to bring young Indian women and girls to Berkeley, California, From 1986 to 1999, he and his family members and associates forced them into servitude and sexual slavery and to work in his Indian cuisine restaurants


Can someone tell me why the surname of Patel is so predominant in the hotel owners? The article doesn't really explain why.


Patel + Hotel owner here.

We are from Indian state Gujarat. Patel is the most common last name in Gujarat.

90+% of Patels I know immigrated to the USA through chain migration. My dad's sister-in-law's sister (A) & her husband came to the USA in last 60s early 70s. Sister (A) applied for the immigration visa for my dad's sister-in-law. My dad's sister-in-law and my dad's brother immigrated to the USA in the late 70s. My dad's brother applied immigration visa for all his brothers & sisters. My dad & his family (including me) immigrated to the USA in the late 90s.

Roughly 200+ of us were migrated to the USA because of the sister (A). Half of them speaks & understand very very basic English. They only have limited options for the job. Mom&Pop kind of motel is easy to run, only requires talking to a few people and its mostly same every day. So they work their butt off for a few years and buy a small motel.

Those who can speak little better English end up working at someone else's hotel when they move to the USA, and from there with the friend/family's help they buy their motel.


>>Patel is the most common last name in Gujarat.

Fellow Gujju here. It is "one" of the most common last names in Gujarat. Probably it might be the most common last name of Gujjus outside Gujarat but I doubt it is so inside the state.


The Gujaratis are known to be big on business as the bread and butter of life. Even the simplest of businesses is something they would rather pick up than learn an actual trade. Of the Gujaratis, the Patel's are known for being the biggest pursuers of business. Aside from being a common name, Patel is synonymous to owning a business.

One of the ways that Gujaratis come to America is use the investments route, sort of like investment chain migration. One member takes an investment, migrates, sets up business, profits, then sends the money back home, for others to travel in the same visa program. Then two people come, twice the profit, twice the pace of bringing people over. These business groups form around family bonds typically.


> sort of like investment chain migration

Most of us came to America through chain migration (Family F3/F4 Category)


In India, last names were usually based on your occupation. And iirc, Patels used to be farmers or merchants. It's the most common Gujarati surname. That's why you would see some people having "Motiwala" as a last name which literally translates to "Pearl merchant".

Source: have the 3rd most common Gujarati surname.


Patel here, Patel as a community has farming background, and usually are quite industrious people, and so are generally in the middle or upper middle class in India also. Most who are coming to USA already have good amount of money or somehow have access to it, but they do not have first world skill for high tech job or business, so for doing business, this is the only option, or grocery store or petrol pumps.


This community uses traditional/informal financing methods with members of their community with primarily "social reputation" at stake. This kind of financing not available to outsiders, and that kind of community effects are every where to be seen in many industries.

For example, there was an article about how Portuguese immigrants have sort of dominated Dunkin franchises.


1. Common Gujarati lastname

2. Good old fashioned nepotism


[deleted]


Patel is a common surname in one portion of India.


The 50% figure is not ownership, but managing. The article misses several important points why the Gujariti could take over the whole south and west in all cheap hotels. The main reason is a special Visa execption, very similar to the Chinese cook visa exception. Family members can easily come over and work there. So they can undercut all costs in running a hotel, esp. with Central American room cleaning. The big chains saw this advantage and put a Gujariti manager everywhere. They replaced room cleaning step by step and are also doing the small repairs by themselves. They have a strong community to help each other out. Biggest problem is room cleaning though. It's a different experience, it smells. Who knows what kind of chemicals they use. For sure the wrong ones. When they advance to $120 hotels is it getting better though, then they can afford proper room cleaning again.


So what else is new? How come every other cop - especially in the North east - is named Dennehy or O'Reilly; every other landscaping firm is owned by people with surnames like Caruso or Zanatta; every other construction firm in California (esp. SFBA) is owned by people with surnames like Monahan and Shanahan.

Ethnic professions are nothing new, and part and parcel of American immigrant history. Just another chapter...


My understanding is that immigrants often have a high rate of entrepreneurship.

It's always nice to hear about people coming to the US and not just taking a chance coming to the US, but also taking advantage of those freedoms to take the risk of starting a business and the massive amount of work that it takes to do so.


The environment back home is so fud up, that , whole family working 12 hours a day seems like real stress reliever. My uncle who went USA and doing the motel thing, used to have business in India. i.e. they were well to do also in India and went there not for more money but lifestyle and education opportunities that India can not provide.


While it's certainly true that people from Gujarat are business minded, I have observed that they are equally narrow minded, especially when it comes to selecting whom they work with and they almost always select a fellow Gujarati.

I have personal experience with this, I had a Gujarati classmate and we had plans for starting up after our college, he later went on to work for his brother in law (who you already guessed it worked in the hospitality industry), he only told me later when I asked that he was pressured by his family to work with them exclusively. You may think that this is a one off example, but it's not, nearly all people I came across had similar mindset.

Also they contributed largely to the election of Modi as a PM in India, who is also (drumroll) a Gujarati, now this may be good or bad depending on how you look at it.

After living in western countries for well over 50 years (calling themselves American, Canadian and British etc), they ooze pride about their entrepreneurial heritage; but they still vote and contribute money towards electing a man whose past screams bloody murder and that is plain hypocrisy!


Gujus(Indian Gujarat people) are not just in USA but even within India they are mostly money lenders and resellers. Most Gujus do not stay in Gujarat, they are business people(buying and selling only no production)


Awesome. I love stories where hard work pays off. Hats off to this family.


Anybody have any real statistics on this? <citation>


I have a datapoint.

I went to university w/ someone's whose family ran a bunch of hotels & motels in the San Jose area.

His surname was Patel.


"No boundary existed between work and life."

I'm some senses, this is a story about an older way of doing things.. or a capitalism that has existed at a smaller scale alongside the I understand/liberal system we generally think of as capitalism (or socialism, really).

That is, things work by convention, affiliation and duty. They don't work through formal agreements, roles and contracts.

Family is a true economic unit, with productive capacity, credit potential and such. Affiliations with other families are important.

The ability of one hotelier family to assess an informal loan to another one... Its not necessarily worse than a Banks's.


Gujarati here. Our success in Motel and Gas Station industry can be attributed to the following. The same model then also can be seen in tech industry. I have explained below :

"Ability to establish trust while bypassing all the conventional channels."

Coming from a socialist country like India to USA I noticed that transaction costs in USA are damn too low simply because of the trust factor. There is no two factor auth each time you do a credit card transaction, you can do self checkouts at Walmart etc. etc. Many of first world citizens might take this for granted but these factors give a huge boost to economy. There are more transactions and less wealth is destroyed just to enforce a contract.

We Gujjus take this to the next level in USA. Consider John Smith decides to run a gas station. He has to appoint a 24x7 attendant at say $10 per hour. So he has to spend $240 per day just for the person. Assuming the profit margin per gallon is $0.15 he needs to see around 100 cars filling 16 gallons before that cost can be earned back. Not to mention these attendants steal cash and other stuff from the gas station store often too. John Smith then hires Jose who is an illegal Mexican at $5 per hour. Jose steals his cash one day and is never seen again or is caught by ICE and deported. Or John Smith sticks to the law and bleeds $240 per day.

Now Dhirubhai Patel buys the same gas station. He makes a phone call and finds another Gujju student who is currently on F1 and legally can not earn and is paying heavy rent in bay area. He agrees to man his gas station at night and sleep in there too. He saves on rent and takes literally no salary until he completes his masters. Dhirubhai saves Around $100 more on this. Also the gujju students is much less prone to stealing and cheating and on other hand is more thankful to Dhirubhai. After completing his masters this kid joins a reputed tech company and later employs Dhirubhai's daughter as an intern. Everyone wins.

I see a lot of hate for Indian tech workers among white nativists tech workers on apps like Team Blind and also on twitter (search for HR392 on twitter). They correctly point out that Indians have been succeeding at a much greater rate than natives. They claim that Indian managers tend to hire Indian employees even in top firms like Google etc.

That might be true as Indians quickly build trust among each other. It is common for a new H1B from India to work for a startup at least for 2-3 years just because founders helped him come to USA even though salary is lower (I did this). Both my founders were Indians and the company was successfully acquired. I left within 6 months of acquisition to join one of the FANGs.

Note: I think the lack of proper deterministic path to green card actually forces smaller ethnic groups to huddle together instead of being more individualistic. This in some way prevents assimilation. There are over 200K tech H1Bs who are here for decade or more and yet wont get their green cards. A lot of them would feel safer in companies where their manager is Indian, CEO is Indian etc. than a general white owned company and might be willing to work for less for the safety of job and presence in USA. Same goes for motels, farming, gas stations and many other businesses which are being completely cornered by Indian-Americans.


> I think the lack of proper deterministic path to green card actually forces smaller ethnic groups to huddle together instead of being more individualistic. This in some way prevents assimilation.

Every ethnic immigrant group huddles together, regardless of visa status. That is basic human nature.


Just to clear any confusion I am not saying the success comes at the expense of breaking the law. In some cases it is true but at fundamental level it is about "establishing trust". You can break a lot of victim-less laws and get away with it when you can establish trust. Most often these are minimum wage laws and immigration laws (both of which in my opinion some of the worst laws in the world).


As a second generation patel I can say entrepreneurship runs in our blood. Although my dad's hotel did not work out, I've never had a full time job with benefits and I've spent 11 years trying to build iorad.com.


Cool app idea


Story of my life.


Is the author generalizing other South Asian immigrants as Indian Americans? Or is it factual that Indian-Americans do own 50% of motels in the USA? Because I have seen a lot of Bangladeshis, Pakistanis and even Arabs owning motel businesses across the USA. I am not cleared about this just from reading the article alone.


> About half the country’s motels are now owned by Indian Americans. A majority of these owners are from Gujarat state’s industrious Patel community, leading them to be jokingly referred to as the Patel Motel Cartel.

They are mostly from one region of India.


Not only loan, but a continuous strong investment from exporters from India who do not move that money back to India. ( Just like Apple or other tech giants are doing. )


I have to wonder if any Gujarati non-Patel Muslims turned up, would they be getting the same handshake loans?


Gujarat is a state in India, where there are a hundred million people or more. A specific tribe of people that happen to have mainly come from Gujarat gave handshake loans to each other, because they are part of the same tribe, and know each other, indirectly or directly. Why would they give handshake loans to just anybody, regardless of their religion or where they came from?


Non-Patel Hindus that are of the same caste as Patels would have a hard time getting Handshake loans. It is really tribal. Within Patels themselves, there are extensive intra-Patel clans.


I know, but I mean there are Muslim Patels too, is what I was driving at.


You wrote “non-Patel Muslims”.

And Patel is just a common name, it doesn’t mean you’re in the same tribe. Especially since in the old days tribes were frequently family oriented and religion was a big part of family.

But tribes keep changing. When everyone was immigrating and desperate, they acted as one and helped each other. Now, the successful ones and 2nd generations americans who can stand on their own have become their own tribe. They’re not going to reach out to their 2nd cousins who are poor and don’t know English well.

Now there are new tribes, mostly split along socioeconomic and education lines, regardless of religion.


Yes I did, implying that Patel Muslims might be given the benefit of the doubt, but non Hindus to boot wouldn’t.


They would not be part of the clan back in India, and would not be part of the clan here.


A NYTimes article from 1999 says it specifically Gujarati Indians, or those with the surname Patel.

https://www.nytimes.com/1999/07/04/magazine/a-patel-motel-ca...


Yes, 60% of motels are owned by Indians, and 1/3 of those (so 20% of total motels) have the surname Patel.


I think it safe to say they mean "Indian American" in a racial rather than national context, akin to "African American". So I'd take it to include people who have ethnic ties to the entire Indian subcontinent, including Pakistan and Bangladesh.

As a Canadian who has lived many years in the US, the casual use of racial descriptors still shocks me. I find is very discomforting to be asked my race on forms, to see national news talk about how different ethnic groups feel about this or that.


No, they explicitly mean Indian, even more specifically Gujarati Indians.


indians were categorized as white for govt purposes in the US until the late 70s when they petitioned the government for a census category so they could benefit from affirmative action. same deal as the new MENA category


Indians don't have their own census category now, either. They're officially considered Asian; the census lumps them in with East Asians and Southeast Asians.


1980 Census

This year added several options to the race question, including Vietnamese, Indian (East), Guamanian, Samoan, and re-added Aleut.

https://en.m.wikipedia.org/wiki/Race_and_ethnicity_in_the_Un...


As an old white american guy, when I read the headline my first thought was Indian = Native American and was thinking it was somehow related to casino resort hotels on reservations but it still wasn't making sense.

On your latter point, absolutely. And the people who make make the biggest effort to categorize people into hyphenated-Americans are the very ones who turn around and accuse people of being some-kinda-phobic or some-sorta-ist if they don't see the world that way.


TLDR: via aristocracy (a good version of it), more or less. IOW, the hard work of generations prior, with "compounded interest" of the hard work of each generation since.

This is definitely worth reading. This short and simple article has lots of lessons.




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