The Real Reasons Why Indian Startups Struggle To Hire - Swaroop C H

2/29/2016 The real reasons why Indian startups struggle to hire Swaroop C H
The real reasons why Indian

startups struggle to hire
Posted by Swaroop C H on November 22, 2010
Filed under: india (/tag/india), startup (/tag/startup)
The last article on difficulty of hiring for startups in India

(/2010/11/11/difficulty-hiring-startups-india/) generated a lot of
discussion (/2010/11/11/difficulty-hiring-startups-india/#comments)
(also see the HackerStreet.India discussion about this article
(http://hackerstreet.in/item?id=69)). I was surprised to see so much
response within 24 hours. I guess it shows how much of a pain point it
actually is:
http://www.swaroopch.com/2010/11/22/reasonsindianstartupsstrugglehiring/ 1/22
Ramjee says (/2010/11/11/difficulty-hiring-startups-india/#comment-

132239): "Bang on, This problem is very severe."
Gowri says (/2010/11/11/difficulty-hiring-startups-india/#comment-

132243): "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 (/2010/11/11/difficulty-hiring-startups-india/#comment-

132244): "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 (/2010/11/11/difficulty-hiring-startups-india/#comment-

132240): "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 (/2010/11/11/difficulty-
hiring-startups-india/#comment-132250) (summarized here, please
read the original comment (/2010/11/11/difficulty-hiring-startups-
india/#comment-132250) for his full thoughts):
1. 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?"
2. "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?"
3. "Uninspiring work. Not to knock on any startups but some time back
facebook clones were all the rage. Now it is groupon clones."
4. "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 (/2010/11/11/difficulty-hiring-

startups-india/#comment-132245):
"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 (/2010/11/11/difficulty-hiring-startups-

india/#comment-132249):
"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 (/2010/11/11/difficulty-

hiring-startups-india/#comment-132259):
"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 (/2010/11/11/difficulty-hiring-startups-
"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

Pranay says (/2010/11/11/difficulty-hiring-startups-
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.
Anirudh says (/2010/11/11/difficulty-hiring-startups-

"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 (/2010/11/11/difficulty-hiring-
"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 (/2010/11/11/difficulty-hiring-

"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 (/2010/11/11/difficulty-hiring-startups-
"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 (/2010/11/11/difficulty-hiring-startups-

"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 (/2010/11/11/difficulty-hiring-startups-
"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 (http://pramode.net/2010/09/27/one-
month-class-report/):
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

(http://icsoftware.in).
The lack of skilled people is an open secret. As Rohit says

(/2010/11/11/difficulty-hiring-startups-india/#comment-132253):
"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

(/2010/11/11/difficulty-hiring-startups-india/#comment-132256) 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 (http://www.guglanisam.me/hiring-method-that-works), What
to look for in startup interviews? (http://www.guglanisam.me/how-
to-take-interviews-when-hiring-for-startu) and Early employees -
Salary & Equity (http://www.guglanisam.me/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 Saurabh Narula puts it (/2010/11/11/difficulty-hiring-startups-

"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

(/2010/11/11/difficulty-hiring-startups-india/#comment-132277).
Update 2: See Ravi Mohan's take on the same

(http://pindancing.blogspot.com/2011/04/why-startups-in-india-
find-it-hard-to.html).
Update 3: See Stalk Ninja (http://stalkninja.com/), a unique initiative

to whet good students and get them involved with startups.
(http://yourstory.in/entrepreneurs/non-tech-entrepreneurs/5803-
with-stalk-ninja-now-startups-can-hire-from-a-pool-of-hand-
picked-students)
Comments
Comments
anish says:
one more truth i would like to mention that

in start ups which is driven by mostly one or two geeks
if you are not one of them them in that case your life will be screwed
in general case i have seen people that they think they are specially
different from rest of the word in this attitude why any good engg will
work with you
Kiran Jonnalagadda (http://hasgeek.in/) says:
Thanks for the plug again, Swaroop. Now we have to work extra hard
to make this happen. :-)
BTW, HasGeek is the same idea we discussed over a year ago when
riding to Jayanagar from Gopal's place.
Manu (http://www.reviewgang.com) says:
Lack of talent is true. I guess everyone clued in on the indian tech

scene knows that. But Zoho managed to work around it. But Zoho was
not paying well enough and Zimbra was able to hire away their best
Anyone who are into startups in India should read
http://indianstartupgyaan.wordpress.com/2009/06/24/building-a-
kick-ass-team-part-i/
http://indianstartupgyaan.wordpress.com/2009/07/08/building-a-
kick-ass-team-part-ii/
and
http://indianstartupgyaan.wordpress.com/2009/06/30/what-ails-
the-startup-ecosystem-in-india
You can't argue with the results - paisa.com by abinash & team is a
finely engineered product. If it fails it won't be due to technical
incompetence.
The options for indian startups are
Grow the talent - Zoho way

Buy the talent - Zimbra way
Spot the talent -
Know the talent -
You do need a core team who are really good at what they do. This
ideally should be founders but if you have the money you should be
able to hire the best. Cleartrip was able to build a product using
Common Lisp in India. Even in valley that would have been difficult.
Some of the employees they hired had no previous knowledge of lisp.
So its is certainly possible to hire and cultivate talent in India.
Equity is only one part of the issue. It is not enough to offer just equity.
Without success tories the allure of equity is not very high. The early
players do not have a good reputation on this (makemytrip, rediff) so

the present startups will have to bear the cross. I would really like to
hear about employees getting rich of equity. Infosys is the only
company I know.
Bharath says:
I have been into recruitments (8 yrs now) and I have worked for a
startup (1999 to 2002)
My experience and outlook on this issue is very different.
First and foremost I don't like the word startup. I prefer to call Tiny or
small business. This is a better word for Indian scenario. As soon as you
name your business as small business, your mind set clearly changes.
You don't bother about getting a hotshot on board. You prefer to get
somebody who knows how to make things and sell. This actually solves
50% of the problem. Secondly, you realize, business is evolutionary and
so you simply start building it brick by brick. And you have all the time
in the world to build it. That is all you want and that is all you do. And
that is how a million companies are built in India. Believe me India has
one of the best tiny / small business in the world. And most of them
are very creative.
Coming to US, scenario is different. Need for venture capital makes

high skilled founders to join hands. Most of the time, early team is
highly capable team and they do everything on their own. And most of
the startups are very focused on single product. Team joins hands even
before a company is started. And initial team is enough to bring the
product to market. And then comes Venture capitalists and rest
follows. Every member of the initial team are capable of forming their
own companies.... but they join hands only because of the unavoidable
issues (Visa, Company registration.... etc).
What I mean is, a startup is a team of founders / partners. That is all.

They must first start making money in the market by selling. Only then
hiring must come. If you are not capable of yourself on your own to
make and sell a product. Do not start a company.
Ajay says:
Excellent post! I agree with most of the opinions expressed/reviewed.

I would like to add one more to the list,
I believe the 'startups in India' awareness is quite low or not up to the

standards among the young graduates/students. Agreed that society
plays a major role in pushing these young candidates to take up jobs in
Infosys/Wipro/Cognizant/etc... , but little do they know how much
their skills are wasted in these companies. I myself have gone through
that phase and would characterize working for consulting companies
as unproductive, waste of time and non challenging.
it doesn't matter which field of study you are from. Everyone goes
through training courses and put into some god forsaken
Struts1/legacy project(s) where, all you do is fix bugs, work with
mundane systems and stay back to provide 'support to clients'. In my
humble opinion, this destroys their creativity and by the end of the
year, they are tuned 'not to think' and just 'follow orders' from higher
ups(needless to say, you covered the 'management craze' in one of
your previous blogs).
Sorry about my rant(couldn't resist), but the main point is, startups
could attract more students/talents by
contrasting the work done in consulting companies to theirs(all the

challenging work they could do!)
conducting info sessions in various colleges. Many of the students
would be interested in attending such sessions[probably more if you
offer free food - that always works! ;) ]
offer part-time internships(payed so much better), conduct
programming contests and challenges - get them involved.
Use facebook/twitter/orkut, throw the message out. invite students
to visit the startup's website.
I know most of the folks who shared their thoughts rant about
students/young graduates demanding higher pay, but such class of
people almost never are the ideal candidates for startups(IMHO).
I am very sure, there are a number of Indian students/graduates out

there looking for a challenge, wanting to make a difference... It is upto
the startups to nudge these folks in the right direction! Good luck :)
Swaroop says:
@Anish Yes, good point, Anirudh has mentioned that (quoted in the
above article)
@Kiran All the best! OMG, that seems ages ago :)

@Manu Very very good points again. You should blog more often ;-)
Agreed about paisa.com, especially knowing bghose and the rest of the
team's capabilities. I should definitely read Abinash's articles.
@Bharath Agreed, you're subscribing to the 37signals approach, but I

would argue that it worked for them because they were doing services
to earn money while building the products, it would not necessarily
work for all kinds of startups, for example, many I know are building
valuable IP (intellectual property) and that requires a certain amount of
manpower, which may not be possible when there are only 2-3
founders.
@Ajay Yes, agreed, the startups have to pitch themselves well.
sashank says:
One of hiring mantra for start-up's i would say is , "Catch them Young"
go back to your college , best place to start with , get few smart kids on
the block for an internship while in college , mentor them and inspire
them on what entrepreneurship and geekdom is all about , give them a
taste of what is it like working for solving something cool , i bet they
would die to work for you , its from my personal experience , I
mentored one student , who later joined some job , when i called him
for a working for an idea in my start-up and that i cannot pay much , as
i dont have funds , he said " for you i would work for free , if required " .
so technical leadership is very much important when inspiring younger
ones
Swaroop says:
@Sashank Excellent point, this is a great idea of "investing in the

future" which is what startups are all about I guess :)
sashank says:
Most of the colleges , claim 100% placements and boast big company
names , we are still first generation Indians to get fancy paychecks
with big companies , we have been brought up from childhood with
only emphasis on studying hard , getting good marks and landing up in
a big company job to earn more, have a stable income and lead a
peaceful retired job with enough savings , in this temperament , not
even students who are brought up with sole reason to land up a good
job would get adventurous to try hands on entrepreneurship , i still
remember how much argument i had with my dad when i wanted to
leave a well paid job for experimenting with my ideas , so it would take
some more time for us to break this .
Kondalu says:
Swaroop - good to see some interesting discussion on these lines.
Here are some of my observations based on my experience with few

startups in Bangalore (note: I moved from one of the big tech web
product companies; now working with startups to find one with good
culture):
1) Sometimes, it is important for the techie founders to accept that the
employees they hire have better talent in certain areas of work. If the
founders have their ego flashing on their faces then the talented
employees find alternate ways. This also contributes to bad publicity.

2) Founders, especially with tech background, should (at least in the
initial stages) work like everyone else, participate in fun activities
within office. It makes a lot of difference when the founding member is
moving with the rest of the crowd like one amongst them. The office
atmosphere is a good selling point.
3) The information flow about happenings related to the company
should reach every employee at a reasonable frequency. This adds to
the point someone was making about the employee being a share
holder in the startup. A significant disconnect in this aspect makes the
gap between the employee and the management in a startup. Note:
Don't sell the "you are also a share holder concept" if you cannot
practice it after the employee joins.
4) Finally, the founders should not assume that the employees
understand that there will be a work pressure thus, they should be
squeezed all the time. It works well when the project scheduling is
done with the right timelines and on exceptions there will be
significant work loads.
5) Some startups tend to spend lots of money on parties when some
good result is seen. It is a good thing. However, when the company
sees good enough financial growth, try to show the employees some
$$$ too. It helps because the employee gets to know that the increase
in value is not just on paper but, it is real when the startup grows
financially.
For employees - startup is not a place where you can relax like some of
the big companies. Also, one might not get to work on the bleeding
edge technologies always; there will be a significant period during
which one has to handle the maintenance/operations part. One should
understand that work in a startup is a mix of all flavors.
Sanjeev Kumar (http://skdangi.com) says:
I found the job posting by Pubmatic (www.pubmatic.com) to be pretty

good and different. Hope others can also learn.
Their Careers page says-
We value innovation, creativity, customer service, and integrity. We

focus on results and having fun. We also try to do things a little
differently at work, so people can be successful in their professional
and personal lives. For example, if you need to go running at 3pm, go
run! If you need to start work at 10am because you’re not a morning
person, start work at 10am. We offer unlimited vacation (you know
when you’re ready for a break) and every employee in our company
receives a full benefits package. We have snacks and drinks for
everyone (we’ll get whatever you want, just let us know). We have a
totally open door policy and encourage everyone to come up with and
follow through on any “bright” ideas to push the company forward! We
expect the best from our team so come to work charged and ready to
dive in each day!
Swaroop says:
@Kondalu Agreed on all points. It is becoming more and more apparent

to me that culture in any organization is top-down, rarely is it a
grassroots thing.
Swaroop says:
@Sanjeev Nice! Now that is an appealing job description.

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2/29/2016 The real reasons why Indian startups struggle to hire ­ Swaroop C H

The real reasons why Indian

The last article on difficulty of hiring for startups in India

Ramjee says (/2010/11/11/difficulty-hiring-startups-india/#comment-

Gowri says (/2010/11/11/difficulty-hiring-startups-india/#comment-

Abhaya says (/2010/11/11/difficulty-hiring-startups-india/#comment-

Abdul Qabiz says (/2010/11/11/difficulty-hiring-startups-india/#comment-

Startups are not promising, yet

2. "Startups do nothing to differentiate themselves from the big corps. If

4. "Lack of technical leadership: Lot of US startups and techies actively

Regarding Point No. 2, Syamant adds (/2010/11/11/difficulty-hiring-

"Perhaps you should consider non traditional working models as well as

And Anirudh adds (/2010/11/11/difficulty-hiring-startups-

Regarding Point No. 4, Harish Mallipeddi adds (/2010/11/11/difficulty-

long-term pay-offs, flexibility of timings) rather than trying to

Even things like liberal work-from-home options or double the

Good Founders are rare, most are stingy

I am an early career engineer, and I have seen many of my friends leave

Anirudh says (/2010/11/11/difficulty-hiring-startups-

Maybe the situation could be different if the founders mentor the

As "Have to be anonymous" says (/2010/11/11/difficulty-hiring-

Good Startup Hires are Rare

As Upasana says (/2010/11/11/difficulty-hiring-startups-

I began my new venture of mentoring B.Tech completed students on August

Learn more about this on the IC Software website

The lack of skilled people is an open secret. As Rohit says

Let's hope that Kiran Jonnalagadda and HasGeek

As Saurabh Narula puts it (/2010/11/11/difficulty-hiring-startups-

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 (http://stalkninja.com/), a unique initiative

one more truth i would like to mention that

Kiran Jonnalagadda (http://hasgeek.in/) says:

Manu (http://www.reviewgang.com) says:

Lack of talent is true. I guess everyone clued in on the indian tech

Anyone who are into startups in India should read

The options for indian startups are

Grow the talent - Zoho way

players do not have a good reputation on this (makemytrip, rediff) so

My experience and outlook on this issue is very different.

Coming to US, scenario is different. Need for venture capital makes

What I mean is, a startup is a team of founders / partners. That is all.

Excellent post! I agree with most of the opinions expressed/reviewed.

I believe the 'startups in India' awareness is quite low or not up to the

contrasting the work done in consulting companies to theirs(all the

I am very sure, there are a number of Indian students/graduates out

@Kiran All the best! OMG, that seems ages ago :)

@Bharath Agreed, you're subscribing to the 37signals approach, but I

@Ajay Yes, agreed, the startups have to pitch themselves well.

@Sashank Excellent point, this is a great idea of "investing in the

Swaroop - good to see some interesting discussion on these lines.

Here are some of my observations based on my experience with few

employees find alternate ways. This also contributes to bad publicity.

Sanjeev Kumar (http://skdangi.com) says:

I found the job posting by Pubmatic (www.pubmatic.com) to be pretty

Their Careers page says-

We value innovation, creativity, customer service, and integrity. We

@Kondalu Agreed on all points. It is becoming more and more apparent

@Sanjeev Nice! Now that is an appealing job description.

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