Thursday, April 26, 2007

re: bangalore becoming too expensive for startups?

This is in reply to Mekin's post "Bangalore becoming too expensive for startups?".
I feel what he is talking has farther reaching and more important consequences than just what is apparent. My reply is a bit long and something I have given thought to of late and thus I thought of making a separate post out of it:

I actually think what is happening is for the better. Like he mentions, correction is already underway and these are some of the visible effects.

Cost of living in large cities in India has gone up considerably. When people calculate Indian salaries, they often use purchasing power parity which is an Indian average and not reflective of the real cost of living in large cities. Life and its costs are very different in cities like Bombay or Bangalore. For example, people buy Nike shoes and those cost exactly the same here as anywhere else in the world ($100 = Rs.4000). And one really can't counter this with an argument that Nike shoes are a luxury and ask people to buy locally made shoes. The IT industry is like a global economy - salaries here are more equitable across countries than in any other industry. Indian salaries were bound to go up.

There is a real shortage of talent globally. Pay scales for real talent are definitely not due for a correction anytime soon. But one may argue that salaries purely in the Indian context may be inflated and perhaps about to see a decline in their rise.

Another correction that will happen, or is happening is in the minds of the people. Like it or not, India is a hot-bed for skilled labour but not for real talent. The kind of people that the IT services companies need is not the same as that required by startups. The quantity and quality of talent in India is overrated. It could have been a different story but in the last 20 years of an impending IT boom, the people involved or responsible for education here have nursed their myopic vision instrumenting syllabi and processes for churning out armies of Java developers instead of computer scientists.

Indian talent can hardly compete with global talent. The 80-20 rule applies here too and it is not hard to see why expats here are so highly valued.

A third kind of correction I see is also intangible. The Indian IT workforce is very young - most of them only a few years out of school - and the immaturity stares at you in the face. Money is an easy attraction and so we see the job market driven mostly by salaries. Startups can hardly depend on this pool of workers for the stolidity and stability that they need. High enthusiasm and the capacity for a lot of hard work are not sustainable by themselves. The correction I am thinking about here is not really a correction but a process of maturing - in the next 5-7 years growing maturity of the workforce will automatically lend itself to stability.

India is not the ideal place to incubate a startup - it never was. It has just become more apparent now because there are so many startups here. One of the biggest reasons for this is the general lack of passion towards anything. People are by and large indifferent as long as they are getting to blow up money at the malls on poor quality branded clothes, unfunny comedy movies and fancy restaurants with bad food. The "chalta hai" culture is so ingrained that is scares me. With it comes an acceptable mediocrity that falls miles short of being able to give birth to what my manager calls "The Wow Effect". I do not know what it is in the culture that is responsible for the lack of passion and I do not know what the remedy could be but until this gets fixed, the new and the unexplored will face insurmountable obstacles here.


nearfar said...

First of all, may I request the IT industry to cease using these two words: `passion' and `challenging'?

Instead communicate in terms of extrinsic/intrinsic motivation. For example, to that fresher who is being recruited say bluntly in front of his face, "We will pay you 8 per year to keep your extrinsic motivation ticking along with other incentives. For intrinsic motivation, ready to get disillusioned." A little exaggerated, but you get the idea.

Umang said...

Sridhar: Passion is something that is very subjective. One may be passionate about writing code and that is difficult to fulfill in the IT industry. Another may be passionate about changing certain aspects of people's lives and that may not be impossible to achieve here.

Disillusionment is part of life. What you say is not very exaggerated. One needs balance between extrinsic and intrinsic motivation and not look for both in the same place at the same time.

nearfar said...

Yea, that is all fine. The point I had addressed was to stop using seductive (if that is the word) words when recruiting people and instead expound to them the rough reality.

For example as part of the interview, why not have the candidate work as part of the team that he will be hired to and ask him to solve a particular problem that the team is currently facing? Both the sides will get to know each other well.

And even the candidate must take his part in being mindful by attacking with killer questions.

If one wants to know about the potential of happiness at workplace he should read Alex. Possibly companies can hire him to speak. But how many cares?

homer said...

I very much agree about this 'lack of passsion' that you mention. The only passion I see is to buy property on Sarjapur Road after getting a job that pays for it. But this lack of passion crowd can be more productive for boring projects in large companies as they dont get distracted or excited by new technologies like Ruby on Rails or Json etc, nor do they waste time going to FOSS conferences.

However I do not think the 'chalta hai' attitude is still here. Its gone.

aman said...

i am fully satisfied with the theory dipicted in "this,that and the other"
all the problems refered here are quiet relevant to the glitches faced by booming IT sector....lack of quality talent and "chalta hai"