Wrote a guest post on NextBigWhat opining that bootstrapping is just a foundation stone for building a large business.
Archive for the ‘India’ Category
In 2010, Bitzer Mobile’s Bangalore R&D centre came to life in a living room in Marathahalli. Ravi (first team member in India) and I wrote much of the first version of Bitzer’s governance console on our respective couches and coffee-tables at Cha Bar in Leela Palace, before we moved into our own office.
In a year, we got a team of kick-ass engineers in place. They built critical parts of the product. However, the first few hires were not easy and was rife with people who kicked tires without joining us. Apart from engineers, QA, office boy, accountant, office manager positions, I also on-boarded an amazing head of engineering which took 12 months!
In 18 months, reviewed close to 2,000 resumes, conducted roughly 400 phone calls and code-jam sessions, followed by approximately 50 on-site interviews, leading to the 15 people we have in Bangalore. I am lucky to work with them.
Here is some gyaan about hiring your first 15 key team members in India:
Always be hiring
Hiring is the other full-time job of a founder, apart from writing code, doing sales and marketing or speaking at events. Most startups start the hiring process, do a few critical hires and then get bureaucratic. I have seen startup founders who start it well and then delegate it to their direct reports or to “managers”. There is a single rule for always-on hiring process–The founders and the first five hires should hire the next 500 and be part of every freaking hiring decision making process.
Use the tools
We started using Recruiterbox from the get-go. I can brag that we were one of the early adopters of this application. We got close to 3,000 resumes in 18 months. Every resume reviewed, annotated and passed around within the application itself. In the first 12 months, every candidate who submitted a resume and was not a fit got a response. However, we stopped the response due to increased spam and sheer volume, but made a point to respond to anybody with whom we had a call.
Most hiring managers fail at the tools. They continue to rely on e-mail for managing the resume queue. Moreover, there is no context if the resume moves around and gets passed as a solitary reaper. The interviewer has to start all over again! Wastes time and energy.
Go deep beyond the interview
Go beyond the technical “chops”. Discover the person you are hiring — pose him left-handed questions, personally take the candidate out for lunch/dinner, let your team take him out for lunch/dinner, have casual conversations, spend time with the candidate away from office. Get as much facetime as possible before pulling the trigger.
You are a startup, find a right match
Just like there are rules of marriage (some archaic), there are rules for early startup hires. It’s difficult if not impossible to get an engineer from top R&D organizations in India to come and join your founding team. We were lucky to have applicants from these companies but a match could not be made. These were some amazing engineers, and to my surprise they were ready to take a massive pay cut. However, based on my gut feeling, as an early stage startup, we were not ready for them.
Don’t boss the interview feedback
We lost couple of solid candidates, which the team felt otherwise, whereas I wanted them on-board. The rule was simple, if there is one negative and the argument cannot be one in favour of candidate, then it’s a NO. In one situation, I rescinded a verbal offer, because we jumped the gun as the fifth interviewer went out for a walk and we did not take his feedback into consideration before making a verbal offer. The candidate was shocked that we changed our mind in less than 60 minutes. It was a tough conversation. This one simple thing gave me a solid trust with the team. I lost a few good candidates (well, I still think they were good!) but that built a foundation for the hiring process.
Hiring senior talent–Not everybody can build Adam’s bridge
Head of engineering is one of the toughest position I filled. I had an odd criteria in mind viz. 10 years of experience, hands-on, startup-guy, big company guy, product experience. Combine this that we are an unsexy reasonably funded startup, and that too in India, this made the job of finding the right person even tough. An engineering manager who is responsible for people’s career has to be humble, full of empathy and a kick-ass developer himself. Three things had to be ensured around his happiness and outlook (a) Not a boss (b) Keeps his family happy (c) Still hungry. It took me close to 12 months to fill this position. The CEO still chides me whether I was really hiring for this position or my progress reports were “cooked-up”. A wrong engineering manager is like arsenic, there are no visible bruises, but gnaws the company from inside, slowly. The engineering leader could make or break your company without anybody knowing about it. Compared to a developer, there are no straight-forward objective tests for a engineering manager.
There is one new rule I followed–Evaluated if the person continues to amaze after the third meeting (maybe a dinner at candidate’s home), fifth meeting (maybe a lunch with my family). Candidates who moved beyond my filter were then interviewed by pretty much everybody whom he is going to work with. Took time–But, I think, I got the best guy on board.
Count the intent (or rather lack of it)
In one situation, with the offer, I had to send our incorporation certificate, proving that we are a real company! In another, a candidate wanted to talk to the CEO, before doing a technical round. None of them joined. Whereas, motivated candidates would pick-up the phone, follow-up, show up on time. The biggest data point I have–from interview to offer, if the candidate has been punctual in taking calls, coming for onsite interviews, turning back the assignments, etc., it’s likely that he would accept the offer. Whereas, candidates who continue to move things around are just plain kicking the tires with you!
There are a lot of tactical things which cannot be disclosed publicly on this blog–without context it would misleading. However, there is only one goal–hire the people who like working with each other and can solve any problem given the right motivation and tools.
FlipKart is acquiring LetsBuy.in. But, there is way too much negativity and cynicism floating around. Let’s balance it out with some positive spin. The genesis of this post was this tweet:
There is too much cynicism in this eco-system and frankly makes me feel quite sick.
— Mayank Sharma (@mayanks) February 9, 2012
People who have done it, never done it, have no plans of doing a startup, all together are calling a wolf in this deal.
This is the venture eco-system, this is how it is played. Companies are built, bought and sometimes brought down. Tejit, my previous startup went through two two (sic.) successive acquisitions in less than three years…and I’m still working. I am still below my quota of Fuck You money. Irrespective of what the end-game is, which seldom is a stalemate, the Silicon valley eco-system is built on two simple things:
- Every startup is a success
- No startup is a failure
This is exactly what needs to happen to India and this deal is one of the threads in arriving at that goal.
After the previous exits, I was able to raise my hand and fill a gap in the Indian startup ecosystem because of the startup experience. The shenanigans of doing one gave me enough confidence to do another one, though Morpheus was on the other side of the fence and helping people getting started.
The current consolidation of Flipkart buying Letsbuy, irrespective of the dilapidated state of the latter is a good thing. Why?
- It gives a necessary boost to the eco-system that bets can be paid off, when the vision is right but the markets are tough. If VCs are forced to write these deals off, it brings a black mark in their report card to their investors (LPs or Limited Partners). However, we as entrepreneurs need to keep the funding cycle alive and rotating every few years.
- Venture Capital is an between food chain of money flowing from people who have it. Why have a spock mark when you can avoid it? While getting a degree, it’s okay to get a summer (or suppli) as long as you come out in that 4 years. Some of the startups are like that failed exam but the venture eco-system allows for “exits”. Would you want the annotation of “suppli” in your degree? Nor do they.
- Entrepreneurs who did “okay” in the current startup become capable of taking even bolder bets. If the start-up simply fails, not that there are no learnings from the same, but parking an almost out of gas car securely is much better than leaving it in the middle of the road.
- For the uninitiated who do not understand the intricacies of the deals, it’s a positive story and brings more people to take the plunge and start their own venture.
Yes, it’s a good PR. Can be written in bold in the resume and can even make you a VC, irrespective of the nature of the exit. That’s how sweet these exits are.
Off-topic: The most worry-some part of the current cynicism is not just the angst against the deals but the so called keepers of the ecosystem advising entrepreneurs to keep away from investors and also advising them to bootstrap their startups to death. They are at total loss to understand that these are venture startups and not a “baniya ki dukaan.”
I’m mostly a spectator investor since last 8 months, with less than two personal deals post Morpheus. Writing this as someone who knows a thing or two about investing in India.
Only 15? That’s how reacted when I saw Pluggd.in’s list of the most promising consumer Internet startups out of India. Why not 50 to watch? or even 25! India has plenty of raw talent, desire to not fail and kick-butts. What’s lacking is a light which shows them that entrepreneurship is yet another career option.
A quick analysis of VCCircle puts the count of angel deals this year to less than twenty-five. Let’s double the number to account for un-announced deals, that brings this to fifty. Freaking 50. That’s it. I’m sure Indian Angel Network alone has more than 100 members!
That’s my wish to Santa for India’s tech venture entrepreneur ecosystem–We need more angels who are ballsy and do ballsy deals. Another wish, we need more investors who really are worthy of being called angels. For me an angel is someone who does a) at least 5-6 deals every year or at least $100K in investments and b) Leads at least 25% of his investments. Hopefully, Indian angels who interacted with Geeks On a Plane travellers, follow up on their word and start closing. Rest are investors looking to double/triple the money in 18 months.
The valuation is maddening, crazy, 4,000 4,500 crores for an e-commerce startup which would get 10% net at best is even crazier. Yes, it is crazy but it’s also fearless at the same time.
You know what is exciting? Creation of a category, creation of demand. The fact that my dad calls me from a dusty little town of Dhanbad, after hearing about Flipkart. Adding to his belief that he is ready to shop online all by himself.
Nitty-gritty of the valuation is for fund managers, analysts, think-tanks and people who are not associated with the company or the deal, to take pot-shot at. I think they are plain wrong if they look at Flipkart with a single eye.
It’s easy to create a web-store online. Give me 10 minutes and I’ll get you started. But, it may take you a week to a month to collect payments online. Shipping & logistics is a much bigger challenge than accepting payments in India. If you are a mom-pop operator you can pack, ship, drop on your own. Think about shipping 5 books every minute. No courier company in India is efficient to track delivery and return with guarantees.
People expect that a company in India, of Amazon scale, including it’s loyalty, personalization, great price and customer service can be built in thin air and without lots of money.
If history is any fortune teller, all bubbles/booms created long term markets and large categories. The Gold Rush created California; the semiconductor, networking and internet bubble in succession (re)created silicon valley multiple times. India’s OTA created air-travel for the masses. The Y2K bubble created Indian IT. And so on.
Hence, this is business as usual, which will lead to creation of large markets, giving people access to many items for the first time and killing inefficient distribution methods of yester-years. It’s a space to watch, participate. The forces of nature use elasticity to keep the bubble in check. IMO, the choice is easy and you can’t run around with pins. When there are bubbles, be like a kid or have the bubble gun.
Disclaimer: I don’t work at Flipkart nor have any direct stock holding nor the founders/management team have picked up my beer tab in the past.
Image lazily lifted from Wikipedia.
Wrote a post on IDG Connect arguing that domestic mid-size businesses are waking up to efficiencies and local software vendors would provide the required tools instead of biggies.
Recently, a friend of mine moved back to India from the US, where he was working as a group product manager of a large accounting software company. Unaware of his recent move, when I called him after several months, it turned out he was working on a startup which was developing software to manage customer sales for Indian retailers.
Software products for sales, customer relationship management, managing loyalty programs, e-mail marketing, recruitment software, patient records management, etc. are common and used by large and small companies in developed countries. They have been used since the days of Visual Foxpro, dBase, Cobol, Powerbuilder, etc, and have gradually matured in both business processes and technical capabilities.
The question I posed to my friend was, “Why wouldn’t the retailers use more established, mature tools which have been around for many years?” I got the reply, “Many years.”
Indian businesses are relatively new to the Internet. A lot of them have been using e-mail as the primary tool for collaboration and communication. They have used it for “automating” various business functions. Apart from e-mail, most businesses have processes which are automated by combining humans and paper-record keeping. However, things are changing. Thanks to a recent push by various agencies, and visibility of such processes in multi-national organizations, Indian businesses have woken up to realize the benefits of technology and how it could boost efficiency. Slowly, these companies have started adopting local software vendors and have been automating pieces of their business processes. Leading to organic growth in the domestic tools supporting them.
The added benefit is the price-tag. Tools from large software companies are not priced right for the developing markets, and are expensive as both on-premise and Software-as-a-Service models. They look more like a premium product to most. Moreover, the complexities of local governance, complicated tax regime, rules and duties are vastly different from what’s offered in most out-of-the-box offerings.
Pick a vertical such as loyalty management; I can count at least 5 companies right away who are serving various niches in this segment. Pick another one, say, CRM, there are many young software companies working on it. A founder of one such (Bangalore-based) startup tells me, “Why do I need to go global? In India, nobody knows about CRM!” No wonder, in 3 years his website now lists marquee mid-size manufacturing companies as his customers.
India is now #2 in generating spam and accounts for 10% of global SPAM. What is not clear from the report is the target of the spam — it only identifies that the source of the spam was from Indian IP addresses.
This is tell-tale and beckons the growing usage of internet in the urban areas of the country. With an impending boom in e-commerce — the day is not far when there will be online shops peddling ‘Musli power’ (the Indian equivalent of Viagra) through spam messages.
India has an umbrella law called the IT Act which governs data privacy, cyber-terrorism, cyber-security and the likes. However, there are a lot of open areas related to personal privacy, sharing of data, personally identifiable information, sharing with consent, etc. The current law talks about penalties related to hardware damages, “insertion” of virus, peddling of porn, etc. But, nothing around annoying marketing messages.
What we need is an Indian version of CAN-SPAM Act which precisely talks about (a) Content compliance (b) Unsubscribe compliance (c) Penalties for sending unsolicited spam (d) Local abuse.net (e) Civil & Criminal enforcement.
A well crafted anti-spam law/act:
- Allows legitimate businesses to send legitimate messages
- Prevents harassment of businesses from customers, ISPs, law enforcement
- Allows businesses to do generate leads and control electronic communications with their customers
- Creates a compliance guide for businesses for connecting with their customers through e-mail & SMS
Email is overloaded. Too many emails, too little time. We still consume email as if it is 1995! I am personally averaging two apologies per week to people whom I have failed to respond in time.
Gmail has solved spam issues to a large extent for it’s users, other email providers are still struggling with spam.
More than spam, it’s missing of legit emails which is bothersome.
We at Morpheus have some ideas and are looking for a few smart techies to solve a few problems around reducing the email overload.
Are you game? Come discuss with us.
Update: It is the company we help you build. You are the founder/CEO whatever. Thought we should clarify that we are not looking for someone to just “code”.
I was reading some Hindi literature over the weekend. Found this doha (a kind of verse) from the great Indian poet Kabir on mentorship.
तारा मंडल वैसि करि, चंद बड़ाई खाई |
उदए भया जब सूर का, स्यूं तारां छिपि जाई ||
Shall update with the translation sometime later. Why don’t you attempt translating this in the comment section?
As a Founder, CEO, whatever of the startup — one thing you would be doing in your journey would be Selling. Selling to customers, employees, partners, investors, family members, competitors. And selling 24×7. Pestering. Following up. Closing. The code you write, the product you build, the team you hire is given. People worry about the actual tangible later, but you need to sell it first. Sell the concept. Sell the features. Sell your vision.
The Sales 1:1 101 begins with an email you send to someone — be it the pitch about the company, a proposal for partnership, or looking for some help.
So you send an email and then … days pass and the email silently gets buried down under. As an entrepreneur what do you do? You have two choices (a) Assume the recipient is not interested and never follow up and move on (b) Do a soft reminder and follow up.
People are distracted. Your customers are distracted. Your potential investors are distracted. There is an overdose. Marketing messages. Sales pitches. Attention is short. It is okay to remind. It is okay to do 2-3 follow ups before getting an answer or giving it up (for 6 months!). You double the interval between each follow up. 1st contact –> 7 days –> 14 days –> 28 days.
Which option you choose makes the kind of entrepreneur you will become! (a) The entrepreneur who follows up; who tries to get his attention and makes an attempt to close the deal OR (b) someone who makes an assumption that customer is not interested in “buying”.
Update: Updated the title…dunno why I wrote 101 as 1:1. Ha.
Like everybody else, I also get a fair share of daily dose in our inbox; some get labelled, others get instant attention, some are read/unread. I wish if emails followed the sentence strategy. This is the reality of information overload and the reason for change in our normal behavior of answering the phone on few rings.
The bird is the Downy woodpecker. Pic courtesy