India’s prized Silicon Valley hires keep burning out

Scaling up problems.
Scaling up problems.
Image: AP Photo/Altaf Qadri
We may earn a commission from links on this page.

For many years, India’s nascent startups have been turning to the West for experienced talent and mentors, offering eye-popping salaries to lure Silicon Valley professionals back home. But the allure of working in India’s burgeoning startup ecosystem has quickly evaporated for a number of senior executives.

Over the last couple of years, internet companies in Asia’s third-largest economy have witnessed a series of high-profile exits. Ex-Googler Punit Soni left Flipkart in April 2016 and last May, Snapdeal lost its chief product officer, Anand Chandrasekaran, another prized Silicon Valley hire, less than a year after he was hired. Zomato’s Namita Gupta, who made the move from Facebook in 2014, also didn’t last a year at the restaurant listing startup.

In March, Nishant Rao, the former LinkedIn India head who has also worked at the company’s Mountain View campus, put an end to his stint at Chennai-based customer support software startup Freshdesk.

All these Valley veterans were hired to lead local startups to new heights but upon their return to India, many discovered they would have to contend with a market that looked far better from the outside.

The fault in our stars

For the people who migrated to the US for higher studies or work, returning to India was at first an exciting prospect. They’d missed the IT boom of the 1990s and 2000s but the positive chatter around prime minister Narendra Modi’s “Make in India” and “Startup India” initiatives made it seem like a great time to move back home.

Over the last decade, India’s startup scene has attracted international attention for its bright ideas, with companies receiving funding from both foreign investors, such as Tiger Global and local legacy conglomerates like the Tata Group and Bharti Airtel. But it still remains a fairly immature industry, with founders focussing on raising funds instead of honing their core products and company values.

When hiring from Silicon Valley, many local entrepreneurs chose to call attention only to the market opportunity, highlighting impressive numbers, such as India’s 300 million smartphone users and one billion mobile subscribers, according to Sripad K N, managing partner at executive search firm Stanton Chase in Bengaluru. They also talked more about irrelevant metrics like gross merchandise value (GMV) instead of profits.

This combined with high salaries on par with US standards—the result of all the money pouring into the sector—made moving to India seem like a great career move.

The reality was a little different.

“The innovation culture in the Valley and India looked all the same [but] on the ground, there were significant gaps,” said Venkat Shastry, the partner-in-charge and leader of the technology & services practice of executive search firm Heidrick & Struggles’ Bengaluru office.

After they made the move, many Silicon Valley professionals realised that Indian startups often suffer from subpar engineering talent and capricious founders. And that made it difficult for one experienced person to make a difference.

Moreover, unlike California’s mature market, which boasts of plenty of benchmark companies to look up to, and experienced advisors to guide new ventures, India’s startups often lacked mentors with “war stories,”  meaning that fledgling startups weren’t always ready for the long haul.

“Everybody threw their hat in the ring,” Shastry said. “But how many were really qualified?”

Adding to the problem was the vast cultural gulf between India and the US.

Work, work, work

While there are definitely perks of working in India, such as a lower cost of living and affordable domestic help, there are a number of difficulties: Pollution is a deadly problem, and power cuts are frequent. Social connections often work better than merit in getting the job done, and red tape makes for an added headache.

But perhaps the biggest struggle lies in India’s work culture. The American 9-to-5, five-day workweek falls apart in India, where days are long and working over the weekends is hardly out of the ordinary, particularly at startups. Gruelling commute times and night shifts to coordinate with coworkers and clients abroad add to the stressful situation.

Peeyush Ranjan relocated to Bengaluru as the head of engineering (R&D) at Google India in 2012 after a 15-year stint at the company’s California campus. Upon his return, he noted that he hadn’t expected the “long work hours and traveling.”

Ranjan managed to stick around for several years before moving to Flipkart in 2015 but ultimately he, too, left his position at the end of 2016. Now, he’s moved back to the Bay Area to join AirBnB.

Punit Soni, who also left Flipkart, noted that culture played a big role in the decision to leave.

“I have talked to almost everyone who has left or is in the process of leaving, and I see two main reasons for these exits: first, most of them didn’t get the right ecosystem within the company, and second, many of those who came from the (San Francisco) Bay Area didn’t realise the cultural difference they would face in the new roles,” Soni told Quartz last year.

And while these physical hardships could have been put up with, the fickle foundations of many Indian startups meant that the compensation of steep salaries wouldn’t last very long.

Cutting costs

During the heydays of Indian startup funding, anybody with a degree from prestigious universities like the Indian Institutes of Technology (IITs), Indian Institutes of Management (IIMs), Harvard, or Stanford could secure venture capital (VC) funding, according to Kris Lakshmikanth, founder of executive recruitment firm Head Hunters India. In some cases, even being a dropout from acclaimed universities was enough. (A case in point is IIT-Bombay dropout Rahul Yadav who co-founded Housing.com.) Consequently, too many startups in the same sectors—food tech, fintech, e-commerce—were funded too fast.

Now, the initial boom has worn off and a funding crunch has kicked in, forcing startups to lay off hundreds of employees. And that poses a problem for “foreign-return” executives, despite their excellent credentials. ”High-cost talent from USA were prime targets for cost cutting,” Lakshmikanth says. “Most of the people who left were asked to go.”

“Some companies went overboard by replacing their very capable teams with big names. Most of these big names weren’t good fits,” Anshuman Das, managing partner at Longhouse Consulting, told the Mint newspaper. “Startups need to strike a balance between hiring from outside.”