Swaroop C H

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Why is no one talking about the difficulty of hiring for startups in India

11 Nov 2010

We've all heard about how startups are key to the future economy of India and we've heard about how hiring should be a top priority for any company - then why is it that hiring is NOT a majorly discussed issue in startup events in India?

I ask this question because, in fact, it is HARD for startups in Bangalore to hire. The problem is of two extremes: The good folks you would want to hire either become entrepreneurs themselves (full of challenges) OR work for big money in big companies (may not have challenges, but feeds their social status). There seems to be no middle ground where people want to enjoy the work which is full of challenges and also have the stability of a salary and the promise of stocks.

Hiring has become almost impossible for startups - right from IIMB-incubated startups which have full of challenges and exposure to companies like Infibeam which does crores in revenue per year and pays market price salaries.

Where to find such good people?

I really wish Pluggd.in would setup an anonymous/discreet matchmaking service between "startup-mindset coders" (the scarcity) with good startups (which seems to be in abundance these days, the irony!), i.e. focus on finding good people first, and then promote the available startup jobs.

Maybe the need of the hour for our startup ecosystem is hiring-for-startup events ("get people to get things done") rather than startup events consisting of motivational speeches ("listen to high-level talk about how to get things done").

Sometimes I think that what is missing in Bangalore (and in India, in general) is a hackerspace culture and a geeks grooming culture. Let's hope HasGeek has something up their sleeves...

This is just a thought running in my head which I'm expressing it here - I've heard the "Why can't I hire good people for my startup?" question so often in the past few months, almost on a daily basis these days, that I really needed to get this out of my head and type it out!

On the other hand, if you think hiring for startups in Bangalore is not really an issue, please do advise, many people I know would be interested to know how to go about it :)

P.S. I'm writing this while I'm listening to sessions at the NASSCOM Product Conclave and can't help but wonder if all the topics discussed here are even possible without having the right people with you in your venture, after all, the founders can't do everything by themselves :-)

Note: This article was a result of a discussion with Ram of Metaome, a IIMB-incubated startup. They're looking for good folks to join them, if you're interested.

Update: Indus has a different take on this.

Comments

Shashi says:

Glad that you raised this point. Though I wonder does hiring problems are only faced when hiring geeks/hackers/developers. What about people needed for marketing/sales etc. ?

Vivek says:

Agree! I think there are 2 things to tackle - getting a hacker & ensuring he fits into the culture of a startup. We are trying to solve one of them :)

Ramjee says:

Bang on,

This problem is very severe.
i. You don't get good people interested to take on challenges.
ii. You don't get good freshers out of college.
iii. Those who work at startups fresh out of college fly out in two years to soo... called big companies.. ..

In similar boat as you are.. figuring out how to solve the problem.

Abdul Qabiz says:

I agree with you.

Hiring is real issue, which affects most of the companies on regular basis.

If it's hard to hire good ones in Bangalore, imagine how it would be in cities like Kanpur. I am optimistic, things would change for good.

We have been working hard, for last two years, to build a small team, with not much success.

Another point:

C) Hiring is relatively harder for startups in third-tier cities because good ones move to metros.

I wrote a long comment but deleted, was not sure of relevancy. I would post on my blog.

Saurabh Narula says:

I completely agree to you when you say "There seems to be no middle ground where people want to enjoy the work which is full of challenges and also have the stability of a salary and the promise of stocks" .. It has almost become a luck play to get a good person on board, till the time you have not failed in hiring a wrong person, the realization is slow to strike that we have actually made a mistake, but then that is how we learn .. and as you point out in your statement, hiring for a startup is a lot different than hiring for big companies, attacking the different problem with same mindset often misleads people in the hiring process.

Gowri says:

oh you could not have hit the nail on the head better!! We are a small, serious high technology company and find it really hard to get good people. First many dont want to talk to no-brand-name companies. Even when we get to make offers, we end up losing so many because TCS or Wipro or IBM or Accenture gave them 20k more for a maintenance project where they will end up modifying 50 lines of code every 3 months. I feel like crying for them!

These people talk nicely about wanting challenging jobs and new technology and all that, but get lured by "social status" of branded companies and few thousands more. I even had one guy who left our company because his future father-in-law did not like that he didn't work for one the "large" companies! One guy resigned because he could not get a good bank loan since the banks were looking for branded or large company employees.

Abhaya says:

Swaroop,

Next time we meet, remind me to buy you a drink. I sometimes wish all the people in Startup ecosystem will stop exhorting people to start their own companies and instead join one of the several hundred around as a first step!

Abhaya

Syamant says:

These are interesting points you have highlighted in selecting people who want to work in start ups or even mid sized companies.

Perhaps you should consider non traditional working models as well as talent from outside bangalore who could work remotely. Also consider people who are experienced and have opted to not work fixed hours. You might want to contact @fleximoms on twitter to discuss this.

Nilesh says:

Syamant makes a very good point. Startups may find it much easier if they start offering flexibility to chose one's hours and days of week/month for work as a perk.

Anirudh says:

I'm a founder and a developer. I don't know why you're so surprised that you're finding it hard to hire developers for your startup. Here are some reasons over the top of my head:


If someone's good at what they do, they are most likely selling their skills to the highest bidder - namely google, ms, amazon, etc. The ones who are trying to work independently (like me) do it because of many reasons - one of them is that you get utmost power, control and authority.
Working for a small startup offers neither.
In India, developers are generally treated like crap. I've got tons of offers from "business"guys who have a stupid idea and a little spare cash. They don't understand technology - and more importantly - it's limitations. Anyone with a little field experience will automatically be wary of such people.
Indians are generally "low-risk" individuals. If there's a talented developer, his/her natural instinct is to go for the best opportunity unless he/she is extremely passionate about a particular field of technology, and your startup is doing some genuinely interesting work in that field.


In short - if you want a good hacker to work with you on your startup offer one or more of the following:
1. Good monetary compensation, or sufficient proof that time invested won't go wasted.
2. A really really really good idea. If you make a hacker sign an NDA, it's a turn-off.
3. A team with credibility - one of the main reasons I'd work for a startup rather than a company is the team.

Manu says:

I think the answers are quite simple :)


First and foremost. Lack of upside. In US startups are an attractive option because
stock options are given fairly liberally and companies get acquired/have an IPO making millionaires out of early employees. In India, from what I've heard stock options are not generous (except in cases like infosys) and stories of people getting rich from startups are non-existent. Joining a startup is a risk. If there is no upside why would someone take that risk? (How many makemytrip employees made it big? How many rediff employees? )
Startups do nothing to differentiate themselves from the big corps. Not to knock on infibeam but look at the jobs page. It is exactly like a big-corp jobs page http://infibeam.com/static/careers.html#SD If you are offering just a market salary why would a good engineer work with you rather than a big corp which offers that and more. Look at the benefits offered by a stealth startup http://news.ycombinator.com/item?id=1891223
Uninspiring work. Not to knock on any startups but some time back facebook clones were all the rage. Now it is groupon clones
Lack of technical leadership: Lot of US startups and techies actively participate in the tech community. They usually have a tech blog where they write about scaling challenges, best practices, new products tested out etc. I have learned a lot from these type of posts. I have never found an indian startup which has a good tech blog. (Couple of indian startups do have people in them who are well known and contributed back for ex: you :) ) but as a company I've never seen an indian startup which contributes back to the tech community


Correct me where ever I've been wrong :). Also this will be a good question to put in quora

theyaga says:

For fresh college graduates, the best thing they can do before trying to take the plunge is to go and understand how startups are run and managed. The learning curve from mistakes can be greatly reduced.

Learn from other people's experiences and your journey can be less painful :)

Pranay says:

I am an early career engineer, and I have seen many of my friends leave startup jobs to get into well-established company. Mostly because the startups seldom live up to the exciting work culture image they generally promise. Also, many of the founders are very stingy in terms of giving away equity. The general view is that, its not fun to be in a startup, unless you are the founders/co-founders.

Rohit says:

At a general level, what we see is a clear lack of skills full-filling each role, be it engg, sales, marketing etc.

For eg: when we look for an engg. to write features, we only seem to get folks who know to write code. Customer acquisition strategies which many speak about are mostly traditional and nothing innovative. Forget about finding folks who help us scale, there are probably handful of them in India who are already picked up Yahoos and the Googles or now Facebook.

I don't think as a society we have matured to a stage where people take up entrepreneurial activity purely driven by passion and not a pay package or brand name. I am hoping in a decade or so, we will have all the ecosystem with people doing just that.

Ayush Jain says:

It is true that there is no major effort at startup events on hiring people for startups. It is also true that it is very difficult to get people to join start-ups and even if they do, they tend to leave sooner than they should. There is an important reason for this which I think founders fail to understand. People who do join startups are mostly the ones who are interested in entrepreneurship or starting up themselves. These people do it for the ownership, respect and the appreciation of being entrepreneurs. The biggest mistake founders do is to treat them like employees. Consider talking to people you wish to hire about stock options as they join, or give them some reason to feel proud as an entrepreneur. This would also add to their ownership of the work they do and you would see a visible difference in their attitude towards work. But most entrepreneurs find it difficult to share the ownership of the company with them and thats why they find themselves struggling.

NK says:

There are multiple reasons.

1: Clearly, most programmers in India want to become managers and manage people rather than to be coding all their career. The awareness and importance of a technical ladder is not prevalent amongst us. As a result, most people prefer big companies where there is a visible change in status every now and then with big teams to manage.

2: Work pressure: The work pressure is definitely much more than a big corporation. Startups are very aggressive and therefore automatically one section of programmers, ie women, drop out, apprehensive of their ability to manage work and family. I would not say all women drop out, but a sizeable population does drop out.

3: Job security: In these days of layoffs and pink slips, most of them want to play safe.

4: Clarity on long term. Some startups I have seen start with a small idea. The entrepreneurs make fast buck with a single idea, sell their company and move on. The employees are left to fend for themselves in a bigger organization. It is even more a problem when bigger organizations buy for the technology rather than the idea because the heart of the product in small companies is typically well understood only by a handful. The others who work on the peripheral parts have no or very less importance in the bigger organization.

Compensation: Some startups offer shares are a means of compensation. Given that these are unlisted, the shares are mere papers and have nothing more than notional value. With all the bubbles in the stock market, shares and stock options are no longer attractive.

I really dont agree to the salary point. Startups do offer lucrative salaries and shares. At times, I think they offer higher salary for 1 person where a big corporation would be hiring 2-3 for same role.

Kiran Jonnalagadda says:

HasGeek HasTrick. :-) But I'd rather demonstrate it in action than brag about the idea, so we will come to that later. DocType HTML5's audience profile will be public in a few days. You'll know then who comes to this sort of event.

Anirudh's point #2 is bang on. It's why initiatives like HasGeek are necessary in the first place.

Harish Mallipeddi says:

Manu (see above) hit the nail with his 4 points. I would never join a startup in India for exactly those reasons. If you cannot offer high salaries, then as a startup you better make up for it in other areas:

1) Great technical work & leadership - do not build yet another PHP/MySQL site. Is at least one of the founders, technically well accomplished and smart? If you built Google News and you quit Google to work on your next big idea, then I'm sure that would instill a lot of confidence about you in the minds of potential hires. But if you are completely unaccomplished yourself, then it's going to be a hard sell.

2) Different work space/work culture - you could try renting some cheap office space near a beach in Goa. I've worked for Yahoo and I've seen Google's offices - they all have swanky office spaces with free cafeterias. You cannot compete with them by renting out a third-grade office space in crowded Bangalore. Try something different. If you look at all the Valley startups, they don't just sell you a job - they sell you a work lifestyle - "come work for us; this is the kind of work culture we have" is always their pitch.

3) Future money - give away generous stock options, and more importantly involve your early employees like they're founders themselves. Do not treat them like code monkeys.

You should do these things above and hire those few 10x engineers rather than going really dirt cheap and ending up with completely unmotivated/stupid engineers who are only working for you because they couldn't get a job at a big company.

Have to be anonymous says:

The founders of the startups are in the attitude of "giving life and supporting a family" for a few people than "taking help from a techie" mindset. Even if they know an employee is not a beggar who has joined his company to help him succeed in a venture, the employer's behavior seldom reflects they have acknowledged this fact. This could be seen right from giving appointment orders till making the employee cry for relieving letters. And it would be funny to note the same employer read about "brands". Would they know customers are of two types, internal and external?

Yes, I was working in startups, and have now finally decided settle down for the "big fish nets". I am now one of the so called tier 1 company employees. Afterall, if the current project is over, the company would actively search in full swing to depute me on another project. I wont get a pink slip as fast as I would get in a "get-the-job-done-and-go-home" startups.

Ashish (Pocha) says:

I agree to some guys on the top - specially Anirudh & the anonymous guy.

The startups are themselves responsible for not being able to get the hacker guy. You need to offer something decent to a good guy, well, if he is better than you & can do lot bigger wonders than you yourself could have done to your venture, why offer him a meager salary & try to buy his services on the gyan 'you get to work in a startup environment'.

Get your fundaes right - offer the guy some equity in company - as that is all you have to offer as startup in india. Well, you can get a good guy as co-founder & not as an employee. Dont be greedy & try to own it all up for yourself. Put some clause for all the founders, like equity vesting over a period of time & you be yourself as part of it. Keep things fair to everyone inside the company, including employees. Treat them like a co-founder & you would surely get some good guys working for you.

Just 2 cents of gyan for all the startups looking to hire the right guy.

Have to be anon says:

What a kickass discussion - have to say, it is good to hear from Ayush, Manu, Harish, and Have to be Anonymous. All your points are really valid - it is generally difficult hiring for startups, but in India, it is doubly difficult.

You have made the points about stock options. You are right - but I think the problem has more to do with how to find those people with whom you don't mind sharing equity - i.e. people who bring a lot to the table. Most of the times the problem is that the founder finds so much difference between himself and the employee's passion, focus, talents, ability to slog etc. that giving a meaningful equity stake becomes really difficult. Which brings us back to the point Swaroop makes in his blogpost about how the rockstar coders are either running their own startups or working for Google/Facebook/Yahoo India.

My two cents. I'm a founder as well who is facing this problem. But the best way to solve the problem is to listen to the other side - so thanks again Ayush, Manu, Harish, and Have to be Anonymous.

Latish Sehgal says:

I agree with most of the commentators above about why it might be harder to hire for startups in India. I did want to offer a suggestion. This is something I have seen small but serious companies do in the US. They organize or sponsor tech user groups and conferences, where most of the devs tend to be passionate and above the average skill level. This usually involves paying for pizza and soda for the attendees. In return, these companies talk for a few minutes about themselves before the beginning of each meeting, and mention any job openings they might have. Great way to build a brand name and hire talented people.
I also strongly agree with offering benefits like working from home/flexible hours. I would give anything to avoid rush hour commute :).

Rams says:

There are not that many startup-type techies out there. That's the simple truth. I am going through my 3rd startup and the reality couldn't be starker. No, they are not hiding under a rock.

Other comments have pointed out the lack of an upside for the non-founders. In any case even stock options in the US for the not so famous startups doesn't amount to much. Even for the early employees, it may not amount to more than a year's salary. I bailed out early a couple of years back after 1/3rd of my options had vested in a Bangalore based startup, that recently got acquired - Even if all of it had vested I would not have made more than 10lacs. This was for an experienced developer with about 8 years experience. The fact that they used python, twisted, blah blah is cool for sure, but, hey, I sure wouldn't mind some more moolah :-)

Upasana says:

I am going to have to disagree with several people - Ayush, Ashish (Pocha), etc. above stating founders are stingy. I know at least a dozen including myself willing to give away 10-20% equity + decent monthly cash for a solid hacker. From architects in Yahoo and Amazon, to 1-person IT consulting guys to 3-4 years experienced guys in IT Services company to guys working in a 6 year old American startup's Indian devcenter - tried them all. You know what? They just cant take the risk! So I dont think badgering Founders for not being open to dole out equity is a good enough reason.

We got some early employees using a fair equation where some wanted more monthly cash + low equity, others wanted low cash + high equity. The decision was left to them on which package they wanted. We found that one of the guys after working 2-3 months and finding out the real revenue/margin numbers himself wanted to reduce his salary for a higher equity.

On the other side, many developers with 2-4 years experience in large companies do not even know what is equity. We had to do 2-3 hour session and send several links to educate a few potentials them on what equity is, how it works so on. Many very young hackers I interviews (21-24) wanted a premium on top of their already inflated existing pay packet (thanks to Services and MNC offshoring centers) and yes they also wanted equity!

I think smart hackers should know their self worth and also the worth of what they are building. If what they are making is exciting and hard for them may be its worth a pay cut for 2 years with a possible equity upside potential? After all last few months are showing indications of a bright M&A future :)

More rants here:http://hackerstreet.in/item?id=69

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