Starting an office in Bangalore, India
I often find myself talking to different decision makers about starting an office in India. I also see this question online sometimes such as at Quora and Silicon Beach. I have had great fun building an office here in Bangalore as an outsider for the greater part of the last two years so I thought I would compile my thoughts here on this topic.
A large part of the post here is from my answer at Silicon Beach.
Before I begin, let me point out the obvious – building a business in any new city or country requires a lot of hard work and different considerations. It needs you to consider new clients, regulations, hiring, culture, etc. Of course what I share may not apply to you directly and you may have different views on this. This post is mainly to share my experience.
We decided to open an office in India in September 2010. The office here actually did not start until November 2010. We started with a team of three people. There were two main reasons why I picked Bangalore above other cities in India:
- 8-9 out of 10 resumes I was getting were from people who were based out of Bangalore or were willing to relocate to Bangalore
- From a product development perspective, the depth of tech talent and the wider ecosystem as an outsider looked attractive
Looking back I should have taken two more things in to account that I did not at the time. They are:
- The road traffic here is horrendous – perhaps only Mumbai is worse in India for traffic which actually makes it quite hard for your employees and you to commute and has other indirect costs and issues
- If you are looking to hire top tech talent, Bangalore has about 150,000 jobs available for about 20,000 really good tech people. So you will really need to build a great vision around the people you hire so that they stay. If someone in your team feels down or sometimes for no reason they can simply change a job rather than talk to you about it. So the sense of loyalty is relatively less prevalent in Bangalore than other cities
If you run a product driven business, Bangalore is actually quite a good place to be. If you are looking at service delivery, there are other cities in India which can be better options.
When we opened an office in Bangalore with three people I felt I wasted about 4-5 months in understanding the work culture here and also some of these differences. However, once I understood these things for the past year or so I am actually quite glad we opened this office. If you are mainly focusing on the cost arbitrage, its not quite as large in the tech space. There is certainly value from a talent perspective and capacity to scale.
So lets look at the positives and what has worked here. Please remember a lot of what I am about to say is not very different from you opening an office in any other part of the world.
In India I personally spend a large part of my time hiring as that is perhaps the most important thing here.
Beyond that pool of the top 20,000 there is ample labour available and if you have the capacity to train people – you can make this work at different cost and efficiency factors. Unskilled labour can be an incredible opportunity if you know how to handle it.
One area that has really worked for us is hiring freshers/students out of Universities. There is some incredibly smart talent coming out of the Indian system. We have made it a rule to hire 2-3 youngsters every 2 months. We groom and nurture them – putting them on project takes 1-2 months but from a long term perspective there is no better investment.
In relation to hiring in particular if I could do one thing differently, I would actually look for an operations manager (as opposed to a tech lead) I knew and could trust from day one. Ideally this should be someone you already know who can help you – or someone through your references or current employee base you can move to India. Being someone who actually grew up in India this hasn’t hurt me as much, but this would have certainly helped even if it costs you more.
Since September 2010, I have been flying between Sydney and Bangalore every 2 weeks – mainly for growth challenges and delivery, but it is really important to be on the ground in India to rally your troops. We have only just appointed a Client Services Lead and a CTO here who should help reduce my personal time spent here so if you have the capacity to do that from the beginning, you should.
Because of the abundance in opportunity available for great tech talent, you really have to sell the vision in person. I don’t think fancy offices are that important – we don’t have an issue. While Indians are very employment and security oriented, you can ensure that all their fears or perceived risks have been addressed by having the right core team in India and being close to them. These are general business culture issues true in Sydney or any other part of the world – nothing that different in India. Once you do that, and the people you hire have the right attitude for you, basic infrastructure is ok.
You can get some unpleasant situations where the person has signed your contract and doesn’t show up on the first day. You can also get situations where the level of talent coming in isn’t right. For situations like those you should ensure you have the right recruitment partners and you plan backups for all positions.
Having the right recruitment partners has really been important in the process. Two firms in particular for us have been true partners in being able to add 4-5 people a month. You can go down the path of finding people on portals, but unless you have dedicated recruiters on your team it is really hard.
Hire slow, fire fast. Cliched – but really really important in Bangalore. Notice periods here for employees are long – sometimes around 2-3 months. That means you will need a build up time of 2-3 months for hiring unless you get lucky with people who are already serving their notice period.
Internal referral schemes are important. While our team has always referred people and that will happen as long as your people love working with you, introducing this from the beginning can help. If you like an employee you have just hired, chances are you will like who they bring with them.
Something else here – there are technical things around salary packaging, “relieving” letters when employee leaves, etc that are quite important in the Indian context. A good operations person should be across this as employees take these things very seriously. Alternatively a good accounting partner can help you with the same.
As I alluded to before a large part of this post is about hiring and people. I believe all businesses are about people. India is not as much different than other parts of the world in relation to the underlying principles of running a good business. It is more about understanding the nuances and investing in your people.
That perhaps is the greatest challenge of them all – working closely with your team to deliver the value you want to. That is something I continue to learn more about every day.
If you are considering running multiple offices, you should also read this – Over Communicate.