The real reasons why Indian startups struggle to hire
The last article on difficulty of hiring for startups in India generated a lot of discussion (also see the HackerStreet.India discussion about this article). I was surprised to see so much response within 24 hours. I guess it shows how much of a pain point it actually is:
Ramjee says: “Bang on, This problem is very severe.”
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 don’t 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!”
Abhaya says: “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!”
Abdul Qabiz says: “We have been working hard, for last two years, to build a small team, with not much success. Also, hiring is relatively harder for startups in third-tier cities because good ones move to metros.”
These comments are actually the best part of writing a blog – getting to hear from other people knowledgeable on the subject and who are actually in the trenches. The various thoughts added by the community was so good that I thought it was best to summarize it in a new post for my own cognition:
Startups are not promising, yet
We all agree that hiring is an issue. But why is it so? I think the best articulation on the subject was by Manu J (summarized here, please read the original comment for his full thoughts):
Stock options have made money for people in Silicon Valley startups. What about in India? “How many makemytrip employees made it big? How many rediff employees?”
“Startups do nothing to differentiate themselves from the big corps. 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?”
“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”
Regarding Point No. 2, Syamant adds:
“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.”
And Anirudh adds:
“If someone’s good at what they do, they are most likely selling their skills to the highest bidder – namely google, microsoft, 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.”
Regarding Point No. 4, Harish Mallipeddi adds:
“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”
As far as I know, Manu hits the nail here on the real problems – startups need to do a way better job of making the job look attractive on the strengths of a startup (technical leadership, technical growth, long-term pay-offs, flexibility of timings) rather than trying to compete with big companies on the strengths of big companies (salary, facilities, etc.)
Even things like liberal work-from-home options or double the number of leaves of a regular job can make startups more attractive, like Harish Mallipeddi said:
“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.”
Good Founders are rare, most are stingy
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.
“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.”
Maybe the situation could be different if the founders mentor the employees, as Ayush Jain puts it:
“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.”
As “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.”
Good Startup Hires are Rare
As 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.”
As 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.
“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.”
Ecosystem
Let’s face it – our ecosystem and family mindsets are not ready yet, we know this one and I think these are the “growing pains” of any startup culture. As Gowri puts it:
“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.”
Geek Out
When I had mentioned that I wish there was a ‘geeks grooming culture’, then the irreverent Pramode C E pointed out that that was exactly his latest venture – and he seems to have had great results in just a month since he started:
I began my new venture of mentoring B.Tech completed students on August 25. The ideas was to take in motivated students, build up their FOSS skills by making them write code/solve problems full-time, and try to use whatever contacts I have with friends and former students in the FOSS community/industry to get them placed with companies who need capable programmers.
Learn more about this on the IC Software website.
The lack of skilled people is an open secret. As Rohit says:
“At a general level, what we see is a clear lack of skills fulfilling 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.”
Let’s hope that Kiran Jonnalagadda and HasGeek can indeed bring these skilled people together and breed a culture of such skills.
Hiring Strategies
Regarding, good hiring strategies for startups, Sameer Guglani has written extensively on this subject on his blog – Hiring method that works, What to look for in startup interviews? and Early employees – Salary & Equity.
Bottom Line
Startups need to pitch why they are better than big companies, it is the same whether it is about the product or about hiring!
“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.”
This has been an enlightening discussion for me, thanks to all of those whom I’ve quoted here (and many whom I’ve not quoted for reasons of length of this article) for their thoughts on this subject :-)
Update: More great insights by Manu J in the comments.
Update 2: See Ravi Mohan’s take on the same.
Update 3: See Stalk Ninja, a unique initiative to whet good students and get them involved with startups.