Cost of Setting up an Non Urban IT Center in West Bengal

I visited Kakinara in Nadia district few months back and was amazed to see a RURAL BPO (or you may term it as Non Urban IT Center).

Mr. Pradip Dey the person who is managing the operations shared with me the following information.

1. Internet Connectivity
A) Primarily broadband services

• BSNL unlimited plans(4mpbs, 25 GB) – Rs 1400 per month, post paid connection
• After crossing the limit of 25 GB the speed comes down to 256 kbps. For this additional service of BSNL – 512 kbps is required which costs Rs 750 per month.
• No other private broadband services are available

B) 3G services
• BSNL and Reliance Plans are available. It Costs around Rs 250 per month.
• Tata Photon Plus costs around – Rs 1100 per month. This is used during emergency purpose.

2. Power Connectivity

• The service is provided by West Bengal State Electricity Board.
• The cost is around Rs 3000-Rs 3500 per 3 months.
• 1 Generator backup is required – Oil Usage around Rs 1200 per month. The generator costs Rs 24,500.
• 1 UPS Inverter is required. The inverter costs Rs 25000

3. Hardware Requirement

• 4 laptops and 2 desktops are currently in use.
• Preference is on laptops over desktops because of 2 main reasons: a) High backup capacity b) Electric Consumption less.

Note: You will get a fair idea if you plan to start something in non urban areas of W.B.

Advertisements

Secret behind Zoho’s success

I recently returned from NASSCOM Product Conclave. On the eve of day-1, November 9th, 2011 I had a 10 minutes interaction with Sridhar Vembu, Founder & CEO, ZOHO Corporation.  I greeted him at first as “Sir”. With a bright smile on his face he looked at my name tag and said, “Aninda, you can call me Sridhar”. “Sridhar, how do you source and retain talent?” was my next question to him.  He stood up and said “let’s walk down towards the main hall”. We stood up. He quickly kept his iPad inside the pouch and we started walking towards the main hall.  “Aninda,” he began, “I do not go by qualification. I recruit candidates who are usually school/college drop-outs, class10 /12 pass or physically challenged and then I train them up, give them more education under Zoho’s premise and they stay with me forever”.  I stared at him and quickly asked “But now Zoho is a brand, what will be your suggestion to the start-ups? How can they follow this model?” He replied “When I boot strapped this company I started with this model, and if I can do it, even others can”.  By now we had reached near the main hall. I escorted him inside, house full of delegates. I thanked him, exchanged a smile and left the place.

Why one say “No” to IT start-ups?

I have personally interviewed a lot of students and asked them why they do not want to join a start-up or SME. I have even asked many IT professionals why they always prefer joining IT MNCs and not SMEs/start-ups.

I will not elaborate much on this, but just in brief would want to share with you the reasons for someone not joining a start-up.

80% of the candidates feel start-ups (1-7 employees) are more interested in “Profit Maximization” rather than “Wealth Maximization”. Hence they feel in secured. Few of the candidates say that start-ups need to be professional (not casual). Some of them feel that start-ups are not “stable” in nature. There are even cases when candidates do not prefer joining a start-up because of peer pressure of the society.  So all these negativity spreads via word of mouth and goes viral, almost like a grapevine,  because of which a candidate does not dare to take the “risk” of joining start-ups (No, I am not blaming the candidate for not taking the risk).

Let me assume 80% start-ups are ambitious, they have a future plan, they are working ethically and are thriving hard to achieve something. But may be out them one player has caused a problem, ill treated a candidate or did something unethical, which in turn spoiled the brand name of the entire IT start-up community.  

Branding does not come by building a glossy website or having a presence in social media. Branding should be an “in-ward – out” approach.  Branding is an evolutionary process and fragile in nature.  So next time if you are not getting any resource to work for your start-up, do not blame the candidate. Let us accept our mistakes (if we have done any) and correct them, minimize the problems as much as possible and let us hold hands to build a strong IT start-up community.

I am not an Engineer, how can I join IT Industry?

I often get to hear this question from students, parents and even from working professionals of other sectors. To the audience I tell one simple thing that “Our IT Industry does not follow any caste system”. At first instance most don’t understand this phrase but later when I simplify it and say, “Even non-engineers can be a part of our IT Industry”, for a moment I see an initial glow on their face. But, the glow fades away very soon. I have to face series of questions just like bullets. Some of these bullets hit me hard. I overcome some of the bullets, while some take a reverse direction (credit goes to NASSCOM for teaching me the reality).

 Let me share with you some of points, which I usually advice them.  Someday you may even face such questions, so these points might help you (act as bullet proof jacket).

 Note: When I mean IT Industry, I am only considering the software segment.

Designing (User Interface Professionals): This is one area, which is of high demand and one need not have to be an engineer to become a designer. Currently there is a “war for talent” among IT Companies to hire world class UI Specialists from India. UI Design is an important and in-demand skill. UI Designers enable the development of complex user interface navigation and workflow process, which further enhances customer experience and increases product value.  There are designing schools where one can pursue designing as a career. Apart from that one can even learn designing from various institutes. At this juncture let me warn you, do not think Web Designing, Animation and Multimedia are the same. These areas are interlinked but not same.  I want to stress on one point – almost 80% of the IT-Software companies are web based companies and they need good web designers. On completion of web designing course – which usually takes a month (you can learn the tool in less than 15 days and rest depends on the level of passion and practice) one will get a job in IT SME/Start-up with starting salary ranging from Rs 8,000 – Rs 10,000 per month (for a fresher).

Content Writing: This is one more area where there is a huge requirement. But content writing is not like essay writing/paragraph writing. One needs to have knowledge about Search Engine Optimization to write good web based content. There are even requirements in areas like technical writing. As more products/services are becoming localized, there are huge requirements for vernacular (e.g. Bengali) content writers. There is a huge growth market in verticals such as Media (Printing & Publishing). As per NASSCOM report the total addressable market for year 2020 for Media (Printing & Publishing) is around USD 17-20 billion. Another business segment where content writers are required is in the field of e-learning.  There are very few institutes who are teaching content writing but the numbers will go up very soon. For a fresher who want to join an IT SME/Start-up can get a salary ranging from Rs 6,000 – Rs 8,000 per month.

 Note: Content Writing and Designing is interlinked, we are living in an age of “info graphics”

 The other areas where there is a huge requirement – Search Engine Marketing, Internet Marketing, Social Media Marketing, Mobile Search marketing. And to learn all these you do not have to be an Engineer.

 There are many students who cannot pursue engineering – may be they could not clear the join entrance examination, or may be some have cleared but due to certain family issues they could take it ahead or maybe there are many students who are not privileged enough to take up engineering.  So if you now have this question in mind “I am not an Engineer, how can I join IT Industry?” or if you come across this question from anybody, you have few points to answer.

“Great Indian IT Product Story” – what is stopping us?

I am sure my friends from the IT community will be able to relate to this. I have read a number of articles and have heard many people giving their insights on this topic. Some will say ecosystem matters a lot and start blaming the government and the state, some will allege “skills are missing”(some will state India produces less PhDs compared to other countries) , and some will say “they need proper funding”.

Let me not get into all these for the time being but, let all of us for sometime start thinking from a different angle.

To start with I want to make a simple statement “You don’t need to invent, rather innovate”

It is completely wrong to say India do not have products (IT products are not included here). Let me give you some examples of products, which are built on Indian innovations and are now slowly moving into world markets (developed countries) – a) Ford, Toyota want to sell their India designed low cost cars globally b) Maggi noodles – a low cost and high nutrient product of Nestle which have been primarily developed for India is on its way to Australia and New Zealand c) General Electric’s low cost versions of ECG and ultrasound machines primarily for Indian markets are now moving to world markets d) Pepsi’s – Kurkure and Nimbooz e)  McDonald’s Aloo Tikki Burger. The list can go on. All these products are “innovated –in-India” and then slowly are moving towards the global markets.

So how such innovations (non-IT) are possible? Why cannot the same happen for our own IT Industry?

If you analyse carefully – traditionally products were designed in developed markets and adapted by the rest of the world. Technology came first followed by price. But what is happening now and will continue to happen is called “reverse innovation” that is low-cost but high value products being developed primarily for emerging markets (like India), which will eventually graduate to the developing world. Now technology is tailor-made keeping cost in mind.

Now back to the IT Industry. Indian IT companies (start-ups and SMEs) are unable to build a product on Indian innovation and then scale up globally. But MNCs or foreign companies have been building products (example many MS products are build from India development centre, many small start-ups in India are working on product development, which have been outsourced to India) How is it is happening? In my opinion “Cost” is a major factor. I totally do not agree with the fact that “we do not have ideas”, we do have ideas but the “cost of execution” and “scaling it up” is a hindrance to this.

By the year 2020, total IT addressable market (NASSCOM-McKinsey Report- Prospective 2020) from new geographies – BRIC region (Brasil, Russia, India, China) will be around USD 380-420 billion ( For India – USD 90-100 billion). That means we will see a lot of IT Innovations happening in Indian Markets. But the question is can our IT start-ups/SMEs do it? US IT Companies can achieve their growth, build products and reduce cost by outsourcing it to India but how can we (Indian IT start-ups/SMEs) innovate? – outsource (how? and to whom?) or focus on our frugal engineering skills (Jugaad)?

Because of these numerous questions I sometimes see a bad dream quite often – Re-birth of East India Company .

Background check – Why many entrepreneurs will fail?

I know “failure is pillar of success” but let us for a moment analyse why many entrepreneurs or start-ups will fail. You will get to read many blog posts as “Why start-ups fail” but let us go to the fundamentals and find the root cause of the problem.

Note: When I say start-ups and entrepreneurs, I mean IT start-ups/IT entrepreneurs with a team strength of 0-10 people.

If you do a dissection of a typical IT company there are 3 major parts each of which can be further sub-divided.

1. Business Promoters/Business Development Heads – their designation may vary from company to company.

2. Support – Finance Personnel, HR Personnel, Facilities Personnel.

3. IT professionals – Developers, Designers, Testers – (primarily)

The trend has been found that 60-70% of the IT start-up entrepreneurs are from last the segment – IT Professionals. Lets dive deeper into this:

Situations:

1)      IT Professionals just hop from one company to another. Life becomes monotonous. They start thinking that they know everything after staying in the industry for just about 4-5 years and then they move out to start their own IT Start-up. In many cases, they move out stealing client base from their previous companies. Sometimes these IT professionals move out because “they had a fight with the management.”

2)       IT Professionals stay in an IT organization say for about 10-12 years or may be even more and then they feel it is time for them to do something good for the society. So they move out to start their own start-up, without even understanding the “business”.

3)      Another trend which is seen recently is that students are discarding their education and getting straight into building start-ups. When asked why have you discontinued your studies? They reply “look at Steve Jobs and Bill Gates”. In some cases students with poor marks cannot get into IT companies and end up starting their own venture. Many start calling themselves “Next Gen-Entrepreneurs.” Even they will fail because 80% of them do freelancing projects and freelancing is not entrepreneurship.

The initial 1-2 years is exciting for these so called entrepreneurs but slowly the problem creeps in – financial issues (because they do not understand business), human resource related issues (cannot recruit people nor can they retain them), marketing/sales (majority are “technical” and have never done sales/marketing in the past), operational issues (output affects).

Advices:

  1. Think a number of times before you start your venture. Journey ahead is not easy.
  2. Knowing technology does not mean you can start a business. Give more weight age on business. After all technology is just a tool.
  3. Think who will work for you before starting anything new.
  4. Motivate students to work in start-ups first, which is the need of the hour rather than telling them blindly “go start your venture”.
  5. Do not build something or start something just because you like it (just to satisfy your creative urge).  Indentify the need first.