My Colleague says, "Hey, the company is not performing well. You know, the employee satisfaction is very bad". When I heard this it sounds like some familiar words. Oh, I've heard the same in my previous three companies! Welcome to the Indian IT company. I just woke up in the morning and said to myself that how challenging would it be to run a company. It is damn difficult. All the previous three companies I've worked with are very well known globally for world class products. So what has gone wrong here. Another thought was slamming the door and it says it would be even more difficult to run a Startup. Although some of the problems faced by Startup may be unique in nature I would focus here more on a Tech Startup and some common problems faced by them.
Okay. Lets talk about some facts here. Typically a Startup is based on an Idea. An Idea is the soul of the Startup which leads to a number of activities. Generally some folks sit together and formulate a business plan. This includes,
- product concept ( concrete shape of idea )
- revenue model
- engineering process (hardware and software development)
- customer base identification
- marketing strategy
- operation strategy (recruitment, management structure)
- expense analysis (salary, real estate, licensing etc)
- competitive landscape (risks etc)
- some more stuffs like SWOT analysis etc (strength-weakness-opportunity-threat)
and the most important "how much money can be made if the plan is followed".
Once the plan is made, they look for arranging the finance. Either it is from their own pocket or they look for an Investor who can fund. This some times goes tricky. Some times to convince the Investors they make some early prototypes. Once the money is arranged, the Startup is formed. Many a times it starts from a garage (or from a modest real estate not from a plush office) where few folks who are mostly tech savvy start developing a software in their personal laptops. However making a hardware based product requires little more professional touch. Here one also has to deal with the factory, shipping and arrange the reference boards which means talking to some Silicon vendors etc. Lets say so far so good.
Now the marketing has signed some deals that means the company has to deliver the product by a date. The challenge starts here. The company starts recruiting people, renting a space, buying or renting few desktops or laptops, buying the hardware equipments, doing some legal stuffs like registration, finance specifics etc. Recruitment is once of the tough tasks. Every company expects to hire the best talent. However since it is a Startup the ball game is different. Typically recruitment is done through a recruitment agency or referrals. Since the first product is not made yet, the company tries recruiting people who have prior experience in a similar field. Some times they are paid 20-30% higher than the market. Some times even more! The catch here is, "how do you know who is the best resource". The most talented ones don't stay longer because they always keep looking for some better opportunities and the not-so-good ones have a low productivity. I feel that this is a classical problem which is been faced by most of the companies but probably they have to live with it. Many a times the companies try to keep a balance by having 20% skilled and 80% not so skilled but trainable. They also prefer freshers to lower the salary base. Freshers also have better enthusiasm to learn through experimenting which is beneficial to technology companies since they rely on innovation.
Running a Startup has a lot of challenges. Only those companies win the battle who show courage of solving the problems.
