This past weekend was one of the best weekends I’ve ever had. It was a little over 50 hours of intense execution by 150 people dedicated to turning ideas into businesses by the end of the weekend. Taking something from the idea stage to launching it with a business model, an investor pitch, and a functioning product is no small feat. To have accomplished this in 50 hours, was truly amazing. In case you don’t know, Startup Weekend NYC is the event I’m referring to.
Below is a list of the teams that formulated an idea, built a revenue generating business model around it, launched it, and a few of them even got customers in less than 48 hours.
Game Builder Studio is a flash platform game editing suite that provides flash developers with the necessary tools to build the next generation of flash games. Games that are more immersive and interactive and visually stunning. It boasts the capabilities of being able to make a Mario Bros. style game, a Farmville style game, or a 3D immersive game. The simplicity of its user interface allows for inexperienced game developers to jump right in and start creating but provides more experienced flash game developers with the ability to add enhanced features as needed using the editors plugin API
Dial-in, pick a song and sing along! The real cool thing about it is you can also send your track over to anyone by putting in their phone number. Try it out by calling Call 201-564-0921 to join the fun!
Disclaimer:I was a part of team Shumarks and personally own 1% of it. Shumarks is the easiest way to bookmark and share articles you’re reading on the web with others and create a permanent store where anyone can always refer to them.
It’s the fastest, easiest, and potentially most fun way to find people you’d want to live with. After quickly creating an online profile describing your living habits and preferences, they’ll send you an invitation to a local meet-up in your area.You’ll only be mingling with those you might want to share a home with. So behave yourself.
VROOMmates had people registered and using their service even before they presented the business on Sunday evening.
This is an absolutely awesome service. Adopt A Hacker gives techies a place to crash when they want to visit NYC. They can stay with some great people for free, get connected immediately into the NYC tech scene and get hacking! Do check it out if you want to visit NYC and hack or if you’re in NYC and would love to adopt a hacker for a few days.
In less than 60 seconds, you can have a super-simple and effective website that provides your visitors all the necessary information about your business. Main Street instantly pulls in content found on popular social websites including Twitter, Foursquare and Yelp. You, the small busines owner, has complete control in deciding which content to promote to visitors of your website. The guys from Main Street hit the pavement hard and got customers onboard withing 36 hours of starting up. Completely awesome!
Another great idea launched this weekend was by a lawyer who wants to commoditize legal documents. For businesses, it’s a platform to access custom tailored legal documents and for lawyers, it’s a platform to discuss and create legal documents.
Building a team under the best of circumstances is difficult at best. As technology entrepreneurs, we will look for co-founders or senior management team members that have experience in engineering, sales/marketing, biz dev, management, fund raising and so the list goes on. In places like New York or Silicon Valley or London, it’s a bit easier to connect with the appropriate people and convince them to join your crazy idea.
Management/Co-Founding Team
In India, specifically, New Delhi, it’s a completely different ballgame. Though the word “startup” has become en vogue for college grads and those early in their careers, it’s still not something that more experienced people are comfortable with. Cities like Pune or Bangalore may be a bit different but it is rare to find someone at a startup that has 10 or 15+ years of sales experience, for example. Out of all the startups that I have come across in Delhi, I can only think of one startup that had a solid co-founding team out of the door and was also hiring senior sales, engineering, and operations folks very soon after starting up.
Finding an experienced team for a startup is very difficult, mostly because successful fist timers either continue on with their venture for various reasons, they cash out and join a VC firm or they disappear for a few years on an extended vacation. Very few of them become serial entrepreneurs and not many of them take on mentoring first time entrepreneurs.
Already having a network of entrepreneurial folks is the ideal situation but since that’s not necessarily the case for those of us not living in India, you can also try a recruiter to help you find an experienced management team, though, recruiters weren’t very useful for me when trying to put together my co-founding team.
I would suggest using personal and professional networks, organizations such as TiE, HeadStart, and Proto to start building a network of potential co-founders and senior employees well before you’ve made the decision to startup in India. If you’re not in India, I would strongly advise creating a budget for traveling to India a few times prior to moving to spend time and meet with some of the people you’ve identified as potential co-founders/senior team members.
Obsession with Entrepreneurship
India truly is a land of entrepreneurs. Everyone ranging from the corner grocery “thela” or pushcart, to the founders of Reliance and Tata are entrepreneurs. What this means in the context of startup team building is that it’s very hard to find good people who want a job a for very long. Generally speaking, competent people in India are perpetually trying to figure out how they can go off on their own and be their own boss. Many times they will get a partner like a friend or relative but rarely will they join a startup where they aren’t at the top of the pyramid.
There are plenty of engineers, sales/marketing people that start up a business of their own on a daily basis, most typically a service oriented business because of the low capital requirements.
One of the ways you can use this entrepreneurial desire in Indians to build your own startup team is to seek out those you want to start their own business. Nurture them, mentor them, and give them equity in your business as well as look at the possibility of funding/incubating their business ideas. Though they may not be ready to be co-founders in your venture, they very well could be superstars in your startup and when the time is right, they may even be your first angel investment.
Being a No Name
Another stumbling block to hiring a strong team is the Indian obsession with brand names. Indian families place a great deal of stress on their kids to go work for a large brand name company. In technology, this means college grads looking for jobs at a foreign multinational corporations (“MNCs”) like Microsoft, Google, Yahoo, Nokia, Motorola, etc. or one of the Indian multinationals like Wipro, TCS, Infosys, HCL, etc. (referred to as The Axis of Evil by Vishal Gondal of IndiaGames). Startups obviously haven’t developed a brand name so recruiting good talent in India is much harder.
Because of the emphasis on brand names in India, what happens is that most of the great talent gets sucked up by the big MNCs and large Indian MNCs who hire 20,000+ engineers yearly. What’s left over goes to the second and third tier tech companies. Finally, whoever didn’t get a job anywhere else submits their resume to more or less every job opening on Monster India, Naukri, etc.
However, there’s no reason you can’t build a brand with a little bit of money and some time. Build your brand by blogging, engaging with people on Twitter and contributing useful, insightful comments in the appropriate Linkedin groups. You’ve all heard this stuff so let’s move onto the fun stuff. Give your time to an entrepreneurial organization like TiE, HeadStart or Proto. Organize events, speak at events, create presentations and if possible, get some press coverage. Traditional media in India still has the breadth and depth of distribution that new media hasn’t been able to achieve yet. Organize and hold BarCamps or similar unconferences and promote yourself and your startup accordingly. You probably won’t be able to build a nationwide household brand name in a few months or a year but you will be able to build a localized brand name for your target audience, potential co-founders and employees with an entrepreneurial bent for your startup.
You can also use the Indian job sites mentioned above but you’ll be buried under a deluge of resumes. Good luck sifting and sorting those few hundred resumes to find the diamond in the rough. It happens but the odds are totally against you finding a star amongst the flood of resumes you’ve received.
If you can find a decent head hunter (“Recruiting Consultant”) that is willing to work with a startup, then I highly recommend using one. They will sort thru the resumes for you and instead of getting two hundred resumes, you may get fifty. The other benefit to using a good recruiter is that they will make sure the candidate actually shows up for the interview.
Dealing with Recruiters
Recruiters will typically take a month’s salary for “freshers” or mid-level candidates and they can take up to twenty percent of the total package for a senior candidate. Everything is negotiable so don’t hesitate in negotiating these fees. One recruiter I worked with started with sixteen percent of the total package or CTC (“Cost to Company”) paid within one month of the person being hired and they finally settled on one month’s salary being paid every quarter over the first year of the candidate’s employment. Recruiters are notorious for placing a person and then recruiting them for another job within three months. This was my insurance policy against the recruiter farming my employees, at least for the first year of their employment.
The flip side to working out a deal so favorable to you is that many recruiters will weigh the opportunity cost of working with you under conditions like this and as the market picks up, they will instead focus on the companies that will give the recruiter more favorable terms like full payment within thirty days of the candidate being hired. If you’re doing a high volume of hires this problem can be mitigated. Unfortunately most startups don’t hire twenty or thirty people in their first year in India unless their a service company and have positive cash flow very quickly.
Miscellaneous Pitfalls
“I’m two hours late to the interview because of traffic”
I’ve had quite a few candidates either show up more than two hours late for an interview or not show up at all. Traffic being the most often used excuse. The truth is, Indians don’t really respect time and this shows in all aspects of day to day life. Don’t take it personally. It happens more often than not so it’s nothing about you or your startup. Forget about it and move onto the next one. One thing that may make you feel like you’re not wasting your time is to schedule two or three candidates to come in at the same time and interview them on a first come, first serve basis. I wouldn’t dream of doing this in the US but in India, it’s the most productive and completely acceptable way of working.
The Employee’s Blank Stare
I had hired a designer who talked the talk really well. I’m not a designer but he sounded good. I hired him and he started work on a Monday. Wednesday morning, his mother called in sick for him. The following Monday, I had to fire him for spending too much time on IM with his wife, looking for another job while sitting two feet away from me and also downloading other people’s designs and logos off the web and passing them on as his own ideas. In the hour and a half “discussion” we had, rather than apologizing for the things he was blatantly doing wrong, all I got was the blank stare. It was my first experience with this sort of thing. Had I gotten a “I’m sorry about that and my problem is …..”, I probably would have given him another chance, while keeping a very close eye on him. I’m still not quite sure what the blank stare is for but in hindsight, I’m assuming it’s an apology without admission of guilt. Much like most settlements with the SEC.
Asides
Design, image, graphic theft is a very common issue in India. Many “designers” are really just PhotoShop jocks taking other people’s work so keep an eye out for this and encourage fresh ideas.
Many new developers suffer from the copy and paste syndrome so try to encourage them to write their own code hence, developing their skills as programmers, and limiting any sort of legal and other liabilities.
Firing people in India isn’t so clean cut so, I’d advise you to look into some of the laws related to Hiring and Firing in India.
“I want my own startup but I don’t want your stinkin’ Equity”
Conserving cash and giving options or equity to employees in India can be tough. Very few 20-somethings will opt for more options than cash. The reason is pretty simple. A check every month going into their bank account that they can show to their parents, grandparents, extended family, significant others and potential marriage proposals goes a lot further than showing off a share certificate. Budget for paying salaries instead of very low salaries and some equity options (“ESOPS”). You may wind up giving the employee some options later on, if they stick around for some time or if you sell the company or go public but for various sociological reasons, “cash is king” so save the equity for those who really value it.
I would love to hear some of your stories and comments. What do you think? Drop in a comment below with your thoughts.
This is part I in a series of posts about issues faced by Teknatus Solutions Private Limited in India from 2007 – 2010. Being the first part, I’m going to look at the steps needed to get a business registered in India. I’ll examine the case of a foreign national/foreign company looking to setup an Indian subsidiary.
Rules in India for registering a company a quite onerous and time consuming. However, shutting down a company is even more difficult so make sure you need to register a Private Limited company or a LLP before going down this road.
Disclaimer: This is not legal or financial advice. Consider this nothing more than an explanation of what I did, and why I did it this way.
Find a Recommended Chartered Accountant (CA) and Lawyer
As with any country, when starting a business, it’s advisable to have a good accountant and lawyer working with you. In India, CAs provide a great deal of legal advice as well as accounting advice. I suggest finding a CA and lawyer in your city that is recommended by someone you know and trust. It took me some time to find a good one that fit into my budget but when I did, his firm took a great deal of burden off me in setting up the company and dealing with the various bureaucracies.
Apply for a PAN (Permanent Account Number) Card
The first thing required to do anything in India is to get a PAN Card if you don’t already have one. If you’re a foreigner or NRI, you probably don’t have one. If you’re a foreigner or NRI moving to India, apply for a PAN Card as soon as possible. The Indian government recently announced that they will begin accepting PAN card applications at embassies and consulates so please check with your local consulate/embassy first. If you’re in India already, the best thing would be to call the IT (Income Tax) Department Hotline and ask them where the closest PAN card processing center for foreigners and NRIs is. Some centers, do not accept applications from foreigners or NRIs. If you’ve already found a good CA or lawyer then they can probably take care of this for you. However, I found that Chartered Accountants, Agents, and Brokers in India were not very effective in obtaining a PAN Card for foreign nationals, though, they were always very confident that they could get it done quickly and easily. Instead, calling the IT Hotline and going in person to apply can be much cheaper and quicker.
Call the IT Hotline for the closest processing center
Go to the processing center with 2 passport photographs (Indian size passport photos, not US size passport photos), a proof of address such as an MTNL/BSNL phone bill, bank statement, or passport copy with your address on it.
Submit the application and if all is in order, you should have your PAN card within a week.
Apply for a DIN (Director Identification Number)
A DIN is required for any and all Director’s of an Indian company. The DIN number is used by a Director for various government and official correspondence as well as opening up bank accounts, etc. As soon as you receive your PAN Card, you should apply for a DIN if you are going to be a Director of the company.
Print out and mail in the DIN Application within 60 days of applying for the provisional DIN. It should be noted here that foreign nationals will need to provide a copy of their passport with the application. The passport will need to be notarized by the local Indian Embassy or Consulate. Before they will notarize the passport, you will also need an apostile from your local city or state government. If you already in India, you will need to go to the Ministry of Foreign Affairs or the local FRO office and have them notarize your passport copy before it can be submitted. If you get the passport notarized by your country’s embassy, you have a 50% chance of being rejected and you’ll need to apply again.
Apply for a DSC (Digital Signature Certificate)
The Indian Ministry of Corporate Affairs has a pretty good explanation of how to obtain the DSC and the approved issuers or certificate authorities from whom you may obtain a digital certificate.
Apply for a Company
This step is probably one of the more complicated ones and I do suggest having your CA handle this step. I found that having my CA get the DIN, DSC, and submit the application of incorporation to the RoC (Registrar of Companies) was fairly cost effective and saved me a great deal of time and aggravation. However, if you choose to go ahead and do it yourself, you should look into the MCA offices in your area and follow the steps necessary to form a Private Limited company in India.
In either case, you must do the following:
Find four possible names, in order of preference, that you would like to use for your company. The company names cannot be in use already and the company name must end in “Private Limited” for a privately held company.
Once a name has been approved by the RoC, submit the Memorandum of Association and Articles of Association. These two documents are critical and for the most part, they are fairly standardized. Your CA will provide these to you for filling in the blanks and then submit them to the RoC on your behalf. Your CA will also guide you in what other supporting documents are necessary.
If everything is in order, you will receive the Certificate of Incorporation
Apply for a Company PAN Card
Once you receive the Certificate of Incorporation, you will need to apply for a company PAN Card. You will not be able to open up a company bank account without a company PAN Card. Typically, you can apply at the place where you submitted the application for your personal PAN Card or your CA/lawyer can usually handle this for you.
Apply for a Company TAN (Tax Account Number)
The TAN will be used for collecting or depositing tax deducted at source (TDS). Like most forms in India, you can fill out the form online, print it out and send in a hardcopy. A list of processing centers can be found here. Consider having your CA or lawyer handle this along with the company PAN card.
The steps I’ve outlined here are pretty general and one thing to note is that the rules and requirements for many things in India change depending on who you speak to you or who’s got your file on their desk. For example, my DIN application was rejected because my passport copy was notarized by the embassy and NOT the Indian consulate or the Indian FRO office. However, the other Director’s DIN applications was successfully processed. Hence, you should know the requirements and know the process but it makes life much easier if you have a trusted resource to handle the bureaucracy for you. If you’re having trouble finding a lawyer or CA in India to handle things for you, post a comment and hopefully, we can get you the right person.
In early 2007, we made a commitment to open our office in New Delhi, India and begin building a platform to help connect India’s unskilled labor force with the Indian middle and upper class that had a requirement for unskilled labor like nannies, cooks, maids, drivers and other domestic services. We finally opened our office in January 2008, cutting through lots of red tape, hiring and firing a few unproductive legal and accounting “consultants”, borrowing office space and hiring a few college students as interns.
Some of the ups and downs that Teknatus faced have been documented on the Teknatus blog. However, the blog has been fairly silent for quite some time. I’ve finally been able to look back in a rear view mirror and talk about the journey, that eventually led to the closing of Teknatus’ New Delhi office, and my return to New York City.
This is the intro in a series of posts I’ll be doing on Teknatus’ journey in India and my decision to ultimately shut down Teknatus Solutions Private Limited. I hope other entrepreneurs in India and those considering a move to India get some valuable information from thus series of posts.
Delhi’s first installment of Startup Saturday is scheduled for the 13th of December 2008. The event will be held from 2pm till 6pm at the American Center, New Delhi.
We’re very excited to be working with the gracious team at the American Center to help add a little something to the burgeoning entrepreneurial community in the Delhi/NCR region.
