Bangalore’s rising salary levels gets it’s first victim – Riya, an image search engine [ later acquired a new avatar called Like]
If you have been a regular reader of pluGGd.in, you might have noticed that one of the standard question that I ask Indian startups in the interview is
“Is Indian tech community ready for startups?”
While few startups [like Ziva] were plain lucky, others [like burrp] have suffered the pain, and are quite candid that finding talent is tough and the tougher part is matching their salary expectation.
Indian tech community doesn’t buy into stock options – they want plain hard cash.
And probably, this is one of the reasons why Riya is closing it’s Bangalore center.
Unlike Silicon Valley, however, the employees in India didn’t value stock options as much as folks do in Silicon valley. It was understandable, however, given they had never seen a friend hit it big or seen the Google like wealth effects which occur every 5 years in the Valley. Hence, they argued more for cash compensation. This combined with the fact that we were going after the best in Bangalore (the most impacted city in India) increased our exposure to wage inflation.
Thanks to hiring spree triggered by big MNCs, the employees are pampered like kids and eventually, the balance of power is shifting towards the techie crowd.
Bangalore wages have just been growing like crazy. To give you an example, there is an employee of ours who took the first 5 years of his career to get from 1% to 10% of his equivalent US counterpart. He then jumped from 10% to 20% of his US counterpart in the next 1 year. During his time with us (less than 2 years) he jumped to 55% of the US wage. In the next few months we would have had to move him to 75% just to “keep him at market.”
Smells like desi bubble burst? I don’t know.
Is Bangalore really the silicon valley of India? Do we really understand what silicon culture means?
Definitely NOT.
Related: Can India ever build a groundbreaking global software product?
tagged: riya
With companies like Infy, how can you even imagine Bangalore to be a silicon valley?
It’s all crap..
Reality is that nobody wants to do any product work in India..it’s all service..service..
I think this is just the tip of the iceberg.
More such startups will pack their bag..
-Anand R.
its just that software engineers are not economists.they simply do not understand stand the hazards of their behaviour.one guy wanted a sal hike just because one of his counterpart in a diff company was getting a higher pay.what he didnt realize was that the role played by the guy was much higher and also the other guy was more talanted .once all these companies shift their base where will all these guys be — on the road????
Yes, and that’s because most of the software enggs. think of short term gains.. why join a startup, take a hit in the salary [in lieu of some esops!)?
THings have to change, otherwise..
I really don’t think that its all to do with just the inflated salary expectations. Atleast in Riya’s case, this was anyway fuelled by Riya’s own compensation policies. Why would one pay 11-13L for a MS fresher, and then cry hoarse when they demand more !!!
Silicon Valley didn’t make it because of just the engg wanting to defer compensation for ESOPs, etc. There still is the active VC culture, industry-academia interaction, the innovation (aka product) culture, etc which exposes & encourages students at a very early age to do their own thing.
The Infys & Wipros are still sweat-sourcing and the Oracles & HPs are still doing sub-standard product dev handed down by their US counterparts. This kind of IT culture sure does not encourage do-your-own-thing kind of engg.
Till some time back, the VC culture was more like – I earned big bucks in the US, let me passively invest in some Indian startups, coz India is the next big place to be. But yes, that sure did set a trend, coz it needs to start somewhere.
How many Indian startups are doing something really different, than copying what has been a success in the US & trying to retro-fit it to India? How many collges have a entrepreneurship course / competition where VCs are critically involved?
Not many, but things are happening. Today’s VCs in India are much more active with their investments. And ofcourse a lot of the big VC names have an India-specific fund signalling their commitment.
The not to serious kinds, not so different kinds will ofcourse shut shop, isn’t that the natural course of things?
We are surely poised at the juncture of a major innovation upheaval in India, we should wait & watch… Or maybe get involved
Oh! and I pen something on pluGGd.in too, plz check out my posts.
Tamal
Great points! The idea behind Indian IT crowd not valuing ESOPs is more of the mentality.
And given the ways companies are pampering the IT crowd, it’s difficult for startups to attract the talent.
Very few of us are ready to take a salary cut, take ESOPs and join startups!
Very few US based Indian setups are doing a good work, and if they face so much of resistance frm the developer community- why come over to India then?
Infact, why give good work to India? Be just another MNC throwing shit stuff (+money) then?
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ashish why are posting old blog entries.If you nothing new ,dont post.At least it will save the readers going away.
Although people find it very exciting to join a startup company anticipating tremendous growth opportunities, I would like to warn people to check the company properly before joining as I have been a victim of the same.
I was working for an organization of repute. Expecting huge growth in a startup, I joined K2 InfoEdge Private Limited that promotes a portal Skills4U.com. The CEO of the company Mr.Manoj Nagaraj utilized my Services in the capacity of Sales & Marketing Manager for one month. After completion of one month, he did not pay me Salary due to which I had to quit the organization. The organization had the malicious intention of just utilizing my rich experience of working with a well known company that was in the similar line of business for a short term and no intention of retaining me as an employee of K2 InfoEdge Private Limited.
Please refrain yourself from associating with companies like K2 InfoEdge Private Limited/Skills4U.com that cheat people to the core.
Mr. Vinod
Can you please give me more specifics, I am being offered a Job by that company to maintain their product. I have good experience [4 plus years] in my field of work and I am looking for a break. I do not want to get on a sticky wicket at this point in my career. Is the product any good? Do you think it will get any place any time soon? I have worked on many online applications and the first look at this gives me an impression of ill-maintenance.
I appreciate your input.
just a bakwasss, why don’t u go to work instead of doing this shit things…..