The care and feeding of Indian startups
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How to run cable |
During my year in Bombay, I hung out with other Indian-American tech entrepreneurs with development teams in the desh. We all struggled with the same basic things. India is enamored with the BigCo’s of the world, but it won’t have its own Silicon Valley until learns to care for startups. BigCo’s build out their own mini-cities — power, roads, satellite Internet — in special economic zones largely absent from the shadow of intrusive government.
But the electricity and Internet which startups rely on are so unreliable, India Shining feels like mostly hype for now. One of the ways India-based venture capitalists pitch themselves against Americans is that you can’t tell Americans that you had no electricity for a week, they won’t understand. I tried seven consumer broadband ISPs and still could not get a fast or reliable Net connection in Bombay. One guy paid his entire Bombay team to do nothing for a couple of weeks after both his main and backup Net connections went down. But large companies can and do shell out for their own leased lines and satellite links.
Small vendors don’t respect time commitments. I moved into an older apartment with ungrounded outlets. The PC would shock you when touched; cable installers turned up complaining of mild shocks on the roof. I hired an electrician who promised to show up at 2 pm the following day; he bailed without even ‘giving a missed call.’ I discovered this was the norm: people are unwilling to say no to your face because you might be Someone Important. And it isn’t considered rude to waste your time given the golden ratio in a former centrally-planned economy — far more time than gold.
So they just don’t show, and the only way to get an electrician to your place is to stuff him in a rick and physically drag him there. This gave me much sympathy for the stereotype of the pushy Indian. BigCo’s suffer less because they deal with larger vendors with more Western-style norms.
India also suffers from a hierarchical, risk-averse, yes-sir, non-self-starter work culture. Startups typically hire experienced people because there’s no fat on the team roster. They don’t usually hire straight from college like BigCo’s and so don’t have the same opportunity to stamp people with their own culture. The unwillingness to do anything without being micromanaged springs partly from a historically weak economy and job insecurity and partly from an education system which emphasizes corporal punishment and rote learning. The former will get better on its own, the latter will not.
You waste a lot of time on unneeded salespeople. Labor is so cheap, tasks are split up between skilled and unskilled workers. There are a lot of make-work jobs. When you buy a washing machine, a rep from the manufacturer pays you a pointless house visit. The typical ISP install goes like this: first two salespeople come by to collect your prepayment. One sits and does nothing. A week later you get a call from the company verifying the order, because lots of salespeople are independent contractors and some are dishonest. Then a team of two cabling guys come by to run a bird’s nest of cable from a neighboring building, criss-crossing the sky haphazardly, into your flat.
Then you wait another week. A guy comes by to install intrusive bandwidth meter software that runs on your desktop and screws up your other programs. Bandwidth is far more expensive, even in dollar terms, than in the U.S. You wait a day or two, and finally support turns on your login and calls you with your password. After all that, you’ve got Internet access that works for 5 minutes at a time at the blazing speed of 512 kbps. A few months later, your account expires and the cycle repeats from the beginning.
In the U.S.: one installer runs cable and configures your PC. You get 5 Mbps and pay on net 30 terms. End of story.
Because the credit reputation system is undeveloped, businesses operate via cash prepayment, no grace period (pay immediately), or aggressive collection. Debt default rates are high and labor is cheap, so ISPs won’t send you monthly bills on net 15. They either make you prepay 3-12 months in advance and cut off your service upon expiry, or they send aggressive bill collectors to your place daily, sometimes even before the bill’s been mailed.
Developed countries like the U.S. empower small companies and individuals with a rich set of services. For India to move from low-end tasks to having its own Silicon Valley requires actually providing these services, whether via government or private companies, rather than just fiating an SEZ into existence and calling it a day.
on Thursday, July 19th, 2007, 7:25 am in Bombay, Business, Economics, Musings › 
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hmmm.. reminiscent of Chekov’s ‘Peasants’?
Remember that your experiences were in Mumbai, where these services are a little better than smaller cities. Also, dealing with private companies is easier than dealing with state agencies like the electricity board and the motor licensing authorities (RTOs). The smaller private companies are also quite disappointing, though.
Indian small and medium enterprises and domestic start ups have been doing well for as long as I can remember. I am not sure if your contention is that US start ups are not getting the same reception in India. That is because of the fact that like any growing economy stability is the primary concern, after a period of stability people will support riskier ventures. That being said the problem for tech start ups like yours may be that they don’t know how to navigate the system. Sadly in India there is an under the table solution for all your problems.
Manish, fascinating stuff. Wondering though, aren’t there “technology incubators” in Mumbai or other cities which would provide the basic infrastructure a start-up needs (reliable power, hi band Internet connection etc.) so the company can focus on its core business? Or, at a minimum, aren’t there sublease opportunities in commercial office buildings where you pay for a couple of offices, a few cubicles, a shared receptionist etc and the infrastructure cost is part of the lease expense? It’s such a common thing here in the US, I’d be surprised if these basic resources weren’t available yet in Mumbai.
My observation is that ‘follow-through’ or ‘polish’ is sadly lacking in end products, unless there is significant executive commitment - who rule by dint of rod and/or personality.
A layman’s perspective, and this gives me no end of grief, the clothes market should be booming in India but isnt. I have a very very bad experience with purchasing a suit from a place called gunga ram in connaught place, who was recommended to me as THE place to go to. I tried a place called jainsons before that but the service was indifferent. Well, the service is horrible all over the place unless you’re lugging around a toady or speaking hindi with a bad accent. Anyhow, so I go in, pick out this excellent fabric (really really good quality). Then the tailor and his flunky come by. Well, I assume they knew what they were doing - but the net result -… for some reason, these guys put enough padding in the shoulders to do the 80’s proud, and the mid riff opening is planned for an expectant guy. The pockets were shallow and made out of cheap cotton. The jacket lining was definitely not silk. WTF man! I havent worn the thing since. It sits and mocks me from my closet. “Hey! you! out there in the cold. haha”
Oh man, your excellent account brought me right back to Trivandrum in 2002. Trying to get the sort of services I’d taken for granted in the US (cell phone, internet) was a nightmare, and I eventually gave up. I did manage to get a washing machine though, through a combination of considerable focus and energy on my part combined with luck and a big wad of cash. I still miss that washing machine.
My other American friends who were working at a new company in Technopark noted this constantly. They complained, but some of them turned into little czars too. That work culture brings out the worst in some personalities.
Kaushik,
You are absolutely correct, there are SEPZs in Andheri and they are building a new one in Navi Mumbai where you can sublease small office spaces. There are places in Bandra Kurla and Nariman Point which also lease out office spaces with all the facilities.
I don’t mean to discount anyone’s experience but like I mentioned before you need to know how to get things done. I don’t think the generalization about the work culture being non-self starter and risk averse holds true. There are plenty of people in their early 30s who are in management positions precisely because of being self starters. I am sure your experience was bad but probably could have been easier if someone guided you better.
Check this out for profiles of startups in India and related topics.
I would not be so hasty in associating their success with self-starting ability. There are 30-something people managing teams of 200 or more in the giant call centers in India. It is not about creating any new product or process or revenue growth opportunity, that I associate with true innovation - but more about the ability to get things done (as you have pointed out). There are scads of wide-eyed greenhorns popping into the workforce and as they press in, somebody gets pushed (literally) to the leadership position. This observation btw does not extend to the manufacturing sector. There is some remarkable work being done for Reliance and Tata steel to my knowledge.
I should have been more specific, I am not talking about call centers, I am specifically talking about Investment Banking and Mutual Funds, both industries place high premium on revenue generation and product innovation. I am not at liberty to disclose names but there are plenty of examples. I take issue with the generalization that the entire Indian workforce suffers from Hierarchical, non self starters yes sir types that the author alludes to.
agreed on that. I dont have a broader experience of the industry but just to share one example, I visited a “sharekhan” outlet in my last visit and I was very pleased with the professionalism, the courtesy, the product offerings - IMO the customer care, the branding and the offices’ ambiance were superior to the financial advisory services I have seen out here.
Sharekhan service is excellent, also check out the Indiabulls locations and any of the HSBC mutual fund and ICICI banks. My point is things are changing some faster than the others. Painting everything with a broad brush doesn’t help anything. BTW both the tailors you mention in comment number 5 are terrible. There is a good tailor in Greater Kailash which may be worth a visit. I personally don’t bother with clothes as most tailor have an attitude about they know better and they end up screwing up everything else.
And that comment summarizes the state of the Indian services sector. :-)
I won’t go as far as that but the service people have a problem with over promising. Hope you have a better experience next time.
Likely true, but having to call up deputy ministers through family connections leaves a bad taste in your mouth when all you want is basic Internet.
My experience and my brother’s experience with a handful of tailors in Delhi is that no matter what you tell them about the fit, they’ll put in massive shoulder pads and a cavernous girth so you look like you’re a walking suit of armor. You won’t get a Zara cut unless you come back for multiple fittings.
True about the internet connections, from what I remember there is a cap on the download. What I was talking about is more to do with getting clearances if you are setting up shop.
Hopefully by the time you get back it will be better.
My God ,electric shocks in the apartment , be careful Manish old building are scary specially in rainy places like mumbai..
Like this article Manish, makes me understand how hard it is to live in India better and start a business in India..
I know for everything there is so much paperwork too..they make u run around offices so much..surprisingly this time I found some banks in India are doing great, I could open an account and get everything done in matter of minutes..there were some business offices where I could not get anything done on time too..
My brother in law tried the same in India to start his own software firm and gave up the dream. Instead he works as a vice president now in one of the top US computer firms set up in India and shuttles between US and India..and he likes that better as facilities and benefits are better though he has to work for someone else..u are right unlike startups big companies in India like google here in US have even cafetarias inside their company serving ten different cuisines, have gym, all kinds of facilities, paid vacations, bonuses and all that jazz even in hyderabad too..
I think my brother in laws friends are still running their startup company in hyderabad taking US projects but they rented a highfi place which has all facilities like here in US..
I heard hitech city in Hyderabad has great facilities including hi speed internet and all that jazz..
Somehow, Chennai seems to be a teeny-weeny bit better. I had to wait just one month from broadband form fill in to access, but maybe I’m missing a lot because I go to school everyday. And, the connection usually doesn’t yank out unless there’s a bit of rain. And bills are better handled here.
Or maybe, this is because my uncle works in BSNL.
I’ll be heading to India in a few weeks and just wanted know if there are any good tailors in Delhi, India or are they ALL worthless? I need a few good suits and reccommedations?