It may be boom time in Bangalore, but tech startups have to meet some testing challenges before they can even open their doors for business, says Saritha Rai.
Innovation is blossoming in India – and at the heart of the subcontinent’s startup culture lies Bangalore. As the innovation ecosystem develops, tech professionals who left the country to study and work overseas are returning home to become entrepreneurs.
Even recent graduates from top global engineering and business schools are opting to start companies in Bangalore, which is seen as the prime destination for returnees.
Creating a company in the city has distinct advantages. Bangalore is perceived as a base for innovation. Historically, the success of Bangalore-based technology services outsourcing companies such as Wipro and Infosys, as well as the more recent valuations of online retailer FlipKart and mobile advertising network InMobi, has reinforced that image.
Bangalore has the most active funding and mentoring network among Indian cities, and links with Silicon Valley are strong. India’s software hub also has the strongest tech talent pool among Indian cities.
But, as start-up activity accelerates, entrepreneurs are discovering that finding talent – a key ingredient to starting up – is tricky. Some of the hiring challenges are common to other Indian cities but Bangalore has many peculiarities all of its own.
Startup challenge 1. Competition for skills from established firms
Hiring for startups is challenging as young Indian graduates prefer big-name multinationals and brands. Also, candidates balk at working long hours, handling quick-changing situations and wearing multiple hats at startups.
Multinationals, Indian outsourcing companies and startups, all vie for the same talent. “It is challenging to secure the desired quality of new hires,” says Bangalore-based Raj Chinai, principal partner, who focuses on early stage investments at IndoUS Venture Partners.
Some startups have found ways to work around this. Northwestern University alumnus Debabrata Bagchi who founded virtual simulation-based education products maker Sparsha Learning Technologies, in Bangalore in mid-2010, says startups are increasingly looking to tier-two Indian engineering colleges to fill hiring gaps.
“These graduates are hungry, willing to take chances and more amenable to startup working conditions,” says Bagchi who has hired and trained a few.
Startup challenge 2. Finding non-tech talent
While tech talent is of good quality, startups often have a tougher time finding first-rate professionals in adjacent fields.
“There is a lack of high-quality professionals in fields such as legal, particularly, and accounting, who have worked for start-ups and understand what that’s all about,” says Anshuman Bapna, founder of startup Mygola.com, a personalised online travel planner. Sales and marketing is another area with scarce talent.
Startup challenge 3. Bangalore’s infrastructure woes
Bangalore’s infrastructure woes are well documented. Horrendous traffic, power outages, and poor connectivity have long been its bane. But entrepreneurs have learned to work around these challenges by…
…moving into office spaces with full power backups, signing on multiple internet providers, and using time spent in traffic – most medium to high-level professionals can afford chauffeurs – to catch up on phone calls and jot down notes.
“The city’s workforce has a globalised, work-anywhere culture which gives startups a tremendous amount of flexibility,” says V Bharathwaj, founder and CEO of MyndGenie Systems, a technology-based emotional wellness management company. MyndGenie has already started hiring while still looking for office infrastructure.
Startup challenge 4. High salary demands
Bangalore’s talent has heavy financial commitments. That is, many young engineers need a certain minimum pay level for many years to come – even as many as 20 – because of down payments they have made on a new apartment or car.
The implications of this issue have to be taken seriously, says Bapna of Mygola.com. “There are many reasons why a 24-year old developer in India does that, besides property speculation.”
Startup challenge 5. Engaging the right recruitment consultants
For Bangalore’s startups, recruiters are not a waste of time. Especially when hiring the first bunch of technical resources, getting two or three recruitment consultants working on the task is useful. Bagchi’s Sparsha Learning was all set to hire an architect-level employee when he developed cold feet and renegotiated his salary with his employer.
A recruiting consultant would have seen this problem coming, he says. But even with recruiters, his startup took months to get the first developer on board, Bagchi says.
Startup challenge 6. Hard cash, not stock options
Bangalore’s tech talent does not buy into stock options. They want cold hard cash. Unlike staff in Silicon Valley, Bangalore employees have little faith in share ownership schemes. That’s because they have never seen a friend or acquaintance hit the stock options jackpot. Barring one notable example – Infosys, nearly two decades ago – there have been no other instances of employees’ making it big with stock options.
Startup challenge 7. Family pressures
When hiring, some startup founders have learned to ask potential hires what their parents or spouse thinks of the new venture. “I’ve had one or two promising candidates withdraw, and it became amply clear that they were not supported in their decisions by their folks,” says Bapna who now asks upfront or even offers to meet the candidate’s family.
Despite these travails, Bangalore is still the destination of choice for entrepreneurs. It is a city that’s open to new ideas, fosters inventive thinking, and welcomes trial and experimentation. “For companies charting new paths, there is no better place than this,” says Bharathwaj of MyndGenie.