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>>it is more aspirational to join Paytm, Ola, Zomato in India than to work for a US based outsourcer. Its hilarious you mention this. Those companies are in do

by kamaal 9y ago

>>it is more aspirational to join Paytm, Ola, Zomato in India than to work for a US based outsourcer. Its hilarious you mention this. Those companies are in double digit billion $ debt, with no sight of returning even a single $ in profit back to their investors. Snapdeal recently bombed. Ola and Flipkart are next. >>It is not even a competition anymore Competition between whom. IT services firms haven't posted a loss making quarter in their history. And Product firms in India haven't posted a profit making in their history. Which is the real trash here? >>I'm able to very easily get highly qualified Indians in Silicon Valley to move back and work on something cool in India. They won't unless you beat Bay Area salaries and award stock options graciously. And that will happen only if you have massive VC backing. Also no one is going to quit their job in a first world country for loss. >>This is the reason that nobody in India (incl the govt) gives a shit about the H1B rule changes in the US. A lot of people do. >>The entire focus of the IT industry is shifting to move up the value chain. Increased salaries on VCs expense doesn't mean we are moving up the value chain. >>We are trying to build more Freshdesk in India and sell them to the world... Rather than body shopping. We were doing that before as well. The IT services firms you see today all started as product companies. In fact they were doing far more tech intensive work than the current breed of product companies will ever do. Most old IT services were early product companies that made banking sotware, embedded systems products and other stuff. The start reality in India is without a VC pumping billions of $s and then ready to write off, all of it. You largely depend of debt(Why do you think real estate is so hard in India), or you have to bootstrap. If you bootstrap you need the financial discipline of a demon. You certainly can't pay Bay Area salaries to build MVP apps and write HTML/JS. Most embedded systems start ups which are not in VC fashion catalogue pay peanuts even today. The sad part of software engineer salaries in India is either US companies pay it, or VCs pay it. If you have to bootstrap, you have to pay atleast 5x less than what somebody like Flipkart pays today.

tschwimmer 9y ago
Citation on FlipKart and Ola being billions of debt? Not overtly doubting, but curious.
- kamaal 9y ago
  Debt is basically taking VC money. There is no way of paying it back, unless they go IPO. Paying it back through profits is a dead end here. People in India are just too price conscious, offer them gracious discounts and they will come to you. The day you stop they go where ever those discounts are. On the other hand they have tried playing the 'exclusive store' game. Its just not scalable, and whoever is try to sell eventually realizes they need a broader audience reach, and bailout immediately. Now even if they have to go IPO they can't do it with their current financials. No public investor is going to put their money in a company whose first $15 - $20 billion in collection will go all to bail out VCs and remainder will go to subsidize customers's purchases. Snapdeal is already toast. The real deal is you can't make losses forever, you have to make profits at some point and you have to make a lot of that to make up for early investors. Ola and Uber are a totally gone case as far as India is concerned. Almost every family here owns scooters, and those who don't will take Uber and Ola as long as they beat auto rickshaw fares. So here is the dilemma. Whether its Flipkart, Ola or Snapdeal. You are competing with road side hawkers and their profit margins. You can see where this is going. Its just that India's purchasing power among the common middle class masses has to go up, and they need to stop thinking in terms of 'price first' approach. That won't happen anytime soon.
  - lawnmover 9y ago
    Of course you sir will be considering all non-profitable startups as in debt. Such a genius you sir.

by kamaal 9y ago

tschwimmer 9y ago

Citation on FlipKart and Ola being billions of debt? Not overtly doubting, but curious.

kamaal 9y ago
Debt is basically taking VC money. There is no way of paying it back, unless they go IPO. Paying it back through profits is a dead end here. People in India are just too price conscious, offer them gracious discounts and they will come to you. The day you stop they go where ever those discounts are. On the other hand they have tried playing the 'exclusive store' game. Its just not scalable, and whoever is try to sell eventually realizes they need a broader audience reach, and bailout immediately. Now even if they have to go IPO they can't do it with their current financials. No public investor is going to put their money in a company whose first $15 - $20 billion in collection will go all to bail out VCs and remainder will go to subsidize customers's purchases. Snapdeal is already toast. The real deal is you can't make losses forever, you have to make profits at some point and you have to make a lot of that to make up for early investors. Ola and Uber are a totally gone case as far as India is concerned. Almost every family here owns scooters, and those who don't will take Uber and Ola as long as they beat auto rickshaw fares. So here is the dilemma. Whether its Flipkart, Ola or Snapdeal. You are competing with road side hawkers and their profit margins. You can see where this is going. Its just that India's purchasing power among the common middle class masses has to go up, and they need to stop thinking in terms of 'price first' approach. That won't happen anytime soon.
- lawnmover 9y ago
  Of course you sir will be considering all non-profitable startups as in debt. Such a genius you sir.