Two Year Blog Break!

Back after a 2 year Blog Break. The last two years have been most exciting, forcing me to hold off on blogging as I came to terms with the changes going on in the world (outside and inside) Probably needed my mind to wade through all the conflicting signals, messages, and inner thoughts which made me feel that my blog will reflect nothing but my state of confusion/complexity.

Anyways, feel clearer headed within and thought I am mentally, emotionally ready to enter this place again. Lets see, how I fare this time around!

From Corporate to Startup: Breaking free of the Golden Handcuffs

Times are a changing! India's own cyber valley has evolved from the so-called 'coolie-valley' to Startup Valley. The corporate goldrush and the pure-play low cost outsourcing, is seemingly receding and with the US reportedly entering a recessionary phase, a clear sense of the way ahead in India is emerging.

The big 5 Service Giants, and all the Worlds Biggest brands put together are finding it difficult to hold onto their 'prized leaders' any longer. There is a whole bunch of senior executives waiting to break free of their 'golden hand-cuffs'.

Reason: Life Stage!

It is my firm belief that the India of 2008 is way different from that of 2003/4/5. Why you may ask and here's my answer...

1. Boredom: The Global biggies (atleast in the IT World) read IBM, Accenture, EDS, Cisco, MS, (feel free to add to the list) are no longer a novelty in India. They are large in India as well.. and that in itself is the problem. As size increases, processes take over and role decreases, excitement wanes and the superstars of the firm get bored.. Well that's the best word to define reality today - Boredom.

2. Financial Security: A lot more Indians are financially secure today - when compared to 2 or 3 years back. With the great IT Salaries and attractive increments, money is no longer the primary motivator for a significant populace of middle and senior level execs. Besides, the smart folks have also invested in Property and the buoyant stock markets.

3. NRI growth: The return of the NRI's back home is another key factor. Having spent years abroad - securing their lives and that of families, they are looking to 'give back' or do something out of the ordinary. Do they want to join a 70,000 plus organization as 'another' Director? Most likely Not.

The above 3 factors has created this increasingly restless community of Executives trying to break the shackles of their 'Golden Handcuffs'. The Big Question - Where Do We Go??

Verdict: Life has come full circle. Time to get into a startup. The VC's and PE's are back and the Angels are coming. People are ready to take the plunge given their 'Life Stage'. This is the key to the next new wave in our evolution - The ENTREPRENEURIAL WAVE 2.0 - The Real Thing! (Unlike 2000). Wait and Watch.

Recruitment Consultant - A mass commodity

The recruitment business in India is probably the most commoditized business. Seemingly attractive from outside, one needs to be aware or beware! Typical traps which an outsider looking to set up a recruitment firm does not see:

1. News Reports : The IT/ITES sector is growing at 35% YOY, Infy ramping up, Wipro, TCS, IBM, Accenture - all set to make India their largest Development center globally.
2. Typical HR Manager/Head statements: We have a lot of requirements across the board, why don't you work with our team. There's a lot of money to be made!
3. Friends/Contacts: I can easily put you onto the following companies - you will have your hands full with work.
4. You: I feel that the general quality of consultants in the market is so poor that I can make a difference in the quality of candidates on offer.

Fine this is the Demand Side of the equation and it sure looks like a rosy business. Low investment in infrastructure, immediate business with potential to do significant revenues across a bunch of marquee companies. This is the bait, trust me. You get into it and 'Reality bites'. Some typical frustrations of a recruitment consultancy:

1. Reality #1: Free for All - Clients (many of them) are so hard-pressed for people that they empanel any consultant who can show them a few options. So there is nothing stopping that low-end consultant from competing with your 'differentiated' offering.
2. Reality #2 : From Head to Junior staff - resumes are welcome from all sources, any consultant, no exclusivity even for a 'Senior Mandate'.
3. Reality #3 : Duplication of resumes and 'First Come First Served': This is a serious joke. Having felt great about yourself about having a detailed conversation and even mentored a candidate, you finally in all earnesty, cross your fingers and send the CV to the client. Instant automated response in your mail box: 'Duplicate'. Reaction: It can't be real!
4. Reality #4: Most consultants do not 'waste' time speaking to candidates. 'Shoot at sight' is the mantra regardless of the candidates being senior or junior.
5. Reality #5:Candidate Attitude -Indifferent to who takes my CV as long as I get a call. Inspite of your noble and caring intentions, the candidate asks you to 'please take it forward'. Well thats when you may feel like a 'Resume Postman' with a difference??

The purpose of this is not to dissuade you, but to provoke you to think deeper about your value proposition.

• What is truly unique, apart from the quality of services (after all quality is commoditized as well). Due you possess domain experience, or a capability which goes beyond quality and cannot be replicated by the commodity hungry consultants?
• Can you get 'exclusive' deals from clients?
• Do you have a 'network' beyond the Job Portals?
• What are you trying to achieve?

Think twice before you take the leap. Its easier to dive into the recruitment ocean, but to swim with the hoardes of sharks requires more than quality, courage and a positive attitude,!!

PS: I run a recruitment firm as well. (Beware of well meaning advisors who have survived!)

Cricket Coach Vs CXO - The hiring parallels

The latest on 'Indian Cricket Coach Saga' suggests that Gary Kirsten has been offered the position of the India coach and is considering the offer.

Sorry, but I can't resist the parallel between hiring the Indian Cricket Coach and the challenge of hiring a CXO in new age India. Lets look at the coach hiring experience in perspective:

1. The full time coach position has been open since March 2007. It has taken 8 months for the country to find a suitable coach. It yet remains to be seen if Kirsten will accept the offer. Even if he does accept, he can at best join in a months time. This makes the recruitment cycle 9 months - should he join.
2. During the past 8 months, the BCCI has met with 3 candidates: Dav Whatmore, Graham Ford and John Emburey. Lesson: Increase your pipeline of serious candidates so that the each person is assessed in relation to the other rather than in isolation.
3. Of the 3 candidates, they met with Dav Whatmore in April, soon after the World Cup debacle, followed by John Emburey and Graham Ford in June.
4. Dav Whatmore was the only serious candidate - being considered in April, and when things fell through, the BCCI did not have a pipeline of candidates to meet, the search had to be resumed afresh. Hence the search lost steam for a bit.
5. By the month of June, the BCCI had become desperate for a coach and shortlisted John Emburey and Graham Ford - without sufficient due diligence. They offered Graham Ford the job - almost overnight and paid the price for it. He refused for family reasons, meaning his motives for meeting them were not clear and he was the wrong candidate. John Emburey was shortlisted overnight without sufficient information, just to give a semblance of objectivity to the process. Lesson: Get real, don't think the world is at your feet.
6. This humbling experience, triggered a more practical approach:A bowling coach - Venkatesh Prasad, Fielding Coach - Robin Singh and an Interim Team Manager - LS Rajput. Working well in fact.

The Indian coach experience is similar to what a whole lot of corporates experience:

1. Initally reject the first couple of candidates : ' We'd like to meet a few more and then decide'. Not really sure whats available.
2. As time goes by they get desperate: Hire and roll out the offer overnight to the 3rd or 4th candidate. Candidate is taken aback that it happened so quick. Feels uncomfortable and backs out. Time lost, back to square one.
3. Finally, hire an Interim CXO and build the internal leadership team to get upto speed.

The Moral of the experience, be it a coach or a CXO - first get an interim team, or key individual in place so that the 'show goes on'. Once the immediate vacuum is addressed, the focus can be on a structured and professional selection process to find a permanent solution. This will address the short term stability needs while ensuring that the long term is not compromised due to desperation.

Startup CXO Salaries

This is a tricky one which I have been grappling with recently. With the tremendous growth in startups the demand for senior folks has increased significantly. In this context, the CXO salary is a critical factor in attracting the right person. However, with startups, we need to address this fundamental contradiction:

"How does a startup which cannot afford to pay market salaries attract the best folks?"

While there maybe several dimensions and view points, the key is finding the right balance between stock and cash - i.e.Risk vs Security. The risk levels of an individual would depend on how financially secure he/she already is, apart from the attitude of course!

Another factor to consider is the current stage of the company:

• Is the company a complete startup with just an idea?
• Has the startup already received some angel funding?
• Has the startup received VC investment?
• Is the company in the first round of funding is it moving to further rounds of funding?

As these questions, suggest, the risk levels decrease progressively as the organization evolves from pure startup to a firm looking for additional rounds of VC funding. So the principle would be to offer higher stock (risk-reward) in the early stages and progressively shift the stock to cash ratio - in favour of more cash (more secure). The key is finding the balance between long term gains and interim rewards for achieving various milestones along the way.

How much stock is another debatable point. Some pointers would be the valuation of the company (If it has been valued) or possibly a small equity stake, if the stage is very early and value still needs to be built. Also the projected valuation of the company as a result of the transformative impact of the incumbent CXO must be considered.

Such negotiations are going to increase in time to come as founders will have to increasingly attract seasoned CXO's into their startup ventures if they need to succeed!

Non branded Entrepreneurs!

Continuing from where I left off on Startups, one of the huge pain areas that I'm trying to understand from an entrepreneur standpoint is - what would make the VC/Investor bite at an unknown, non branded but passionate entity which does not possess the calling card of IIT/IIM.

This story seems paradoxical to me and pretty skewed against the new age, youthful entrepreneur, or the once failed entrepreneur - who is at it again. It seems that it is their destiny to sacrifice and fight a million battles to get some VC oxygen, whereas the 'Old Boys Network' works overtime to chase the same tried and tested names - even if they are first-timers. Many times it boils down to IIT/IIM/BITS et al. What about the hungry, sharp folks who did'nt go to these schools. While there are success stories, the odds are often stacked against them for not 'belonging' to the club.

The VC Industry must nurture the entrepreneurial spirit in our country. This involves taking some leaps of faith beyond the scope of their 'traditional world view'. India as a nation is risk averse and tag conscious! As a result, a lot of potential gets filtered and possibly wasted.

The time has come for VC's to break the elitist mindset and open-source the nurturing of entrepreneurialism in our country.

Startups and Indian culture

Had a very interesting meeting with a leading venture capitalist this morning. We got talking about how finding the right fit for a startup is such a challenge in India. Here are some examples which tell the tale:

1. 'I don't mind compromising on the bonus which I presently get in my organization, but my fixed component must be preserved'. Stocks over and above this, of course!
2. 'I have invested in two properties and a house in Palm Meadows (Bangalore's hottest NRI destination). My EMI cost itself works out to xxx. Obviously one needs to take all this into consideration.'
3. 'I have already worked in a startup once before, but one of the things that I did'nt like was that basic things like a HR Policy were not in place, add to that the fact that many times there was no water in the water cooler".

Well, thats exactly why these organizations are startups. Do people join startups thinking purely of stocks and cashing out! Well, what we realized is that what is missing most often is the right attitude... Can this person work in a vacuum where he needs to clean his own ...

Add to that, can he or she prepare for that one big time in their life where they do something for the sheer glory of doing it and nothing else. Are prepared to feel good about what you've done and go through, even if you fail and lose money!

These are deep incisive questions that anyone considering a startup organization must consider.. else, you will be a fish out of water.

This apparently is the difference between India and Silicon Valley.